Black Sea ammonia prices edge up to $515/tonne FOB for June

09 May 2013 12:53  [Source: ICIS news]

LONDON (ICIS)--The benchmark Black Sea ammonia price climbed slightly on Wednesday after fertilizer giant Yara purchased 65,000 tonnes from NF Trading at $515/tonne (€391/tonne) FOB (free on board) for June loading, up $4/tonne on May business.

The small price rise comes amid a tightening of the global ammonia supply/demand balance as natural gas curtailments in Egypt and Trinidad and Tobago compound reduced spot availability in the Arabian Gulf (AG) due to scheduled plant turnarounds and unplanned outages.

Finland-headquartered NF Trading, which handles all Odessa Port Plant (OPZ) output following its recent exclusive supply deal with the Ukrainian producer, has yet to conclude any other spot sales for June, though leading trader Transammonia (Trammo) and US industrial giant Koch are expected to purchase cargoes in the next couple of weeks.

Ammonia prices have fallen sharply since the third quarter of 2012, with prices sliding from $650/tonne FOB Yuzhny and $720/tonne CFR (cost and freight) Tampa since October. Yara recently settled the May Tampa price with its customers at $587/tonne CFR – down $10/tonne on April.

In Trinidad, the recent increase in natural gas curtailments to 20-25% continues to impact ammonia producers, with energy authorities on the island yet to inform suppliers of when the situation will improve.

East of Suez, while ammonia producers such as SABIC and Qafco continue to maintain planned and unplanned shutdowns are putting upward pressure on prices and they are focussed on contract commitments, buyers insist their ammonia requirements are much reduced because of production cutbacks at downstream caprolactam, acrylonitrile and nitric acid plants in Korea and Taiwan.

Netbacks from the latest AG contract business are heard at $541-545/tonne FOB, although ammonia producer PIC is understood to be targeting $570/tonne FOB for a 23,400-tonne spot cargo that will load in Bahrain and Kuwait in late May or early June.

($1 = €0.76)

By: Richard Ewing
+44 208 652 3214

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