Ammonia US

US ammonia prices moved lower in the three months to mid-February as weaker market sentiment and a decrease in Black Sea pricing dominated, despite expectations that agricultural producers will have sizeable demands for the crop nutrient.

The increased demand from the agricultural sector was supported by estimates that US farmers could plant as much as 99.3m acres in corn during 2013 to take advantage of surging prices for the crop. Ammonia is the major source of the plant nutrient nitrogen for most corn growers.

With seasonally weaker demand and lower prices being revealed in recent transactions from the Black Sea region, prices have slowly decreased and there is some sentiment that perhaps the current price range could fall by another $25-30/tonne by the time March contracts are settled later this month.

Ammonia production in Trinidad continued to be curtailed during this period as producers were limited by natural gas deliveries from the National Gas Company that were reduced by about 10% during the period, which comes on the heels of a 20% reduction in November and by 40% during October.

The February contract price settled at $655/tonne CFR Tampa, down $18/tonne from January, and down $30/tonne from December 2012.

With seasonally weaker demand and lower prices being revealed in recent transactions from the Black Sea region, prices have slowly decreased, and looking forward, there is some sentiment that the current price range could fall by another $25-30/tonne by the time March contracts are settled later this month.

It is still expected that there will be a robust spring application season and that the refilling period for distributors is currently ongoing in order to be ready for plantings which are expected to commence, depending on weather, in March.

Updated to mid-February 2013