Yuzhny ammonia prices slide again on Nitrochem spot sale

12 March 2013 16:04  [Source: ICIS news]

LONDON (ICIS)--Ammonia prices in the Black Sea fell again on Tuesday after trader Nitrochem sold a 23,400-tonne spot cargo to a Turkish buyer at a price that market sources said netbacked to $530-535/tonne (€408-412/tonne) FOB (free on board) Yuzhny.

Just two weeks after the benchmark Yuzhny price fell to $550/tonne FOB for March loadings from February's $570/tonne FOB level, Toros purchased a mid-sized cargo of Togliatti-manufactured ammonia from Nitrochem.

The cargo will load on the Gas Grouper on 13 March and is scheduled to discharge at Mersin in the next few days.

Separately on Tuesday, NF Trading sold 40,000 tonnes of Black Sea ammonia to US industrial giant Koch at a price the producer confirmed was “below” the $550/tonne FOB price level recently achieved for other March loadings.

The Helsinki-headquartered trading group declined to give a more specific figure, although market sources said the price was in the $530-540/tonne FOB price range. Koch never comments on its ammonia purchases or sales.

The cargo will load in late March and is understood to be destined for the US. While a vessel nomination has not been heard, there are suggestions it could be the BW Havis.

However, that vessel is understood to be heading to a dry dock for unspecified repair work, meaning Koch may have to carry over the cargo for loading in April instead.

Ammonia prices have fallen steadily in recent months from a 2012 high of $650/tonne FOB Yuzhny, due to softening demand from industrial buyers in Asia Pacific along with reduced seasonal demand from agricultural users in India.

With ammonia producers in the Black Sea claiming a spot price of $540-550/tonne means they only break even, there are suggestions producers like Ukraine's Odessa Port Plant (OPZ) may reduce spot ammonia availability until market activity picks up and prices rebound.

Also on Tuesday, Nitrochem confirmed it has extended its supply agreement with Indian Farmers Fertiliser Co-operative (IFFCO) that will mean around 80,000 tonnes of Russian ammonia will be shipped to India per quarter this year. The contract is priced under formula.

The supplier loaded the Clipper Mars with 40,000 tonnes of Black Sea ammonia in early February for delivery to IFFCO/Kandla and IFFCO/Paradeep around mid-March.

The vessel will load a similar-sized cargo in Yuzhny early April and return to India in early May, with similar shipments taking place throughout the rest of 2013.

($1 = €0.77)

By: Richard Ewing
+44 208 652 3214

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