30 September 2011 17:25 [Source: ICIS news]
LONDON (ICIS)--Yuzhny ammonia prices have jumped around $60/tonne (€44/tonne) in the past week on the back of limited supply resulting from production issues, maintenance turnarounds and strong demand levels, market sources said on Friday.
Latest business was concluded between Finnish supplier NF Trading and two traders at $650/tonne FOB (free on board) for end-October shipment from Yuzhny. It is understood that around 50,000 tonnes of ammonia has been agreed at this level.
Earlier in the week there were unconfirmed reports of business at around $608/tonne FOB and $615–620/tonne FOB. Prior to that, trader Transammonia purchased a cargo of Ukrainian ammonia at $595/tonne FOB.
Last week, Yara purchased October material at $588/tonne FOB.
The steep rise in prices has been attributed to the current tight supply situation, which has forced buyers to pay more to secure volumes.
The availability of ammonia at Yuzhny has been reduced in September and will remain so through October as a result of maintenance turnarounds at Russian and Ukrainian plants.
One ammonia line at Odessa Port Plant in Ukraine was down during September and restarted early this week. Russian producer Rossosh shut down for maintenance at the start of September and is due to restart in mid-October. Meanwhile, one ammonia line at Ukrainian producer Stirol Gorlovka will shut down for two weeks at the start of October.
Supply out of Baltic ports is also being limited by maintenance work at Russian plants.
At the same time, ammonia production in Trinidad continues to be affected by reduced natural-gas deliveries. Producers have been informed that gas deliveries will be curtailed by up to 30% during October.
These supply limitations come at a time of strong demand ahead of the fall application season in the US, plus robust requirements from European and North African buyers.
The tightness in the western hemisphere is being underlined by the movement of ammonia cargoes from the Middle East and Egypt to North Africa and the US.
Norway-headquartered Yara shipped 40,000 tonnes of Saudi ammonia to the US in mid-September, while Transammonia is expected to ship another Saudi cargo to the US in early October. Meanwhile, an Egyptian cargo was loaded for the US last week.
($1 = €0.74)
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