Yuzhny ammonia prices shoot up on strong demand, tight supply

11 May 2012 17:21  [Source: ICIS news]

LONDON (ICIS)--Yuzhny ammonia prices shot up this week as traders stepped in to the market to secure June tonnages amid strong demand from the US and Europe, combined with tighter availability, market sources said on Friday.

Sales this week totalled 110,000 tonnes for June shipment at prices $70-80/tonne (€54-62/tonne) last business out of Yuzhny for May shipment.

Supplier NF Trading sold 60,000 tonnes to Yara at $550/tonne FOB (free on board) and subsequently sold 40,000 tonnes to Koch at the same price and a further 10,000 tonnes to an unnamed trader at $560/tonne FOB.

May tonnes were sold in the $475-480/tonne FOB range.

NF Trading expected to have 120,000-130,000 tonnes available for June shipment from Yuzhny, but has little left to offer.

Ukrainian producer Odessa Port Plant (OPZ) is not producing ammonia for export at present, which means remaining availability for June is thin and prices are likely to rise further for next business, sources said.

OPZ may potentially decide to restart its production as export prices have now risen above its production costs, but the producer will carefully assess the strength of the market to avoid having to reverse the decision again if prices fall.

US demand for ammonia is strong for June and July cargoes, and the higher prices in Yuzhny suggest the June contract price in Tampa will rise above $600/tonne CFR (cost and freight).

The May Tampa price was agreed at $545/tonne CFR, up $70/tonne from April.

($1 = €0.77)

By: Rebecca Clarke
+44 20 8652 3214

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