The Outlook Ammonia Prices, markets & analysis
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Prices for ammonia in Asia during the second quarter (Q2) were mostly weaker, with decreases in nearly all regions.
In Taiwan and South Korea, movements were nearly all downward, with the prices softening by $30-50/tonne between April and June. However, prices in India during Q2 were steadier, moving down slightly to $470-530/tonne CFR (cost and freight) by end June from $500-530/tonne in early April.
Regular contract deliveries kept buyers in the Far East covered, with very few spot sales concluded. Turnarounds in downstream caprolactam (capro) and acrylonitrile (ACN) plants and overall soft market conditions were a key factor in poor demand.
From late 2014, ammonia storage in Taiwan will be reduced with the sale of the site in Kaohsiung. However, tanks of around 40,000 tonne capacity will remain at Taichung.
Indian and Indonesian spot demand was somewhat better with Fertilisers and Chemicals Travancore (FACT) and Cheil Jedang Indonesia (CJ) both regularly holding purchase tenders.
Regular spot activity was seen between Indonesian producer Kaltim Parna Industri (KPI) and international trader Transammonia (Trammo), which purchased a number of spot cargoes during the quarter.
Updated to Q2 2014
The benchmark Black Sea ammonia price remained relatively stable at $500-515/tonne FOB (free on board) Yuzhny for April and May loadings. However, the price fell by around 10% for June cargoes amid softening demand and increased spot availability in the Baltic and North Africa.
Against a backdrop of the tense geopolitical situation in Ukraine and uncertainty over the price of Russian natural gas imports, ammonia cargoes continued to load normally throughout the quarter. The deteriorating security situation in eastern Ukraine did lead to the shutdown of ammonia operations at Gorlovka and Severondonetsk in early May.
Major producers NF Trading and OPZ – which took one of its ammonia lines off line for maintenance in early June – had hoped the supply squeeze would generate some upward price momentum. However, weak urea prices meant extra ammonia cargoes were available in the Baltic, with Yara International and Koch Industries buying around 100,000 tonnes between them.
These purchases by regular Black Sea buyers were compounded by improved spot availability in Algeria, where Moroccan phosphate giant OCP sealed a spot deal for 40,000 tonnes of Sorfert ammonia. These deals placed further downward pressure on June cargoes in Yuzhny, with prices falling to $450-465/tonne FOB.
Updated to Q2 2014
Domestic ammonium phosphate demand decreased significantly in April, which saw a growing number of producers diverting their attention to export market. However, most market participants held a pessimistic market outlook for April as the export market conditions were poor in the previous year and as Indian buyers held lower buying ideas in the first quarter of the year.
In May however, many monoammonium phosphate (MAP) and diammonium phosphate (DAP) producers were not inclined to deliver a large amount of cargoes to ports as they did in the previous year, in order to avoid increasing opportunities for price cuts by Indian buyers. Plant operating rates decreased to 50-60% because of producers’ bearish export expectations. Even if an low export tax window opened, producers were also not eager to deliver their cargoes to ports. They firmed their selling ideas at $435-440/tonne for 64% DAP.
Export prices were at around $450/tonne CFR (cost & freight) India for DAP in late May and early June, supported by international ammonium phosphate prices. In addition, demand for MAP and DAP was strong from the US, which saw export prices for ammonium phosphate firming and orders increasing gradually. Plant operating rates rose to 65-70%.
Updated to Q2 2014
The US Ammonia market has seen a very robust period of applications as farmers planted another large corn crop, which has left expectations of an equally strong refill period next month as producers and retailers look to move the necessary volumes needed to replenish the system.
Pricing in Tampa has decreased over the quarter from April’s level of $580/tonne CFR, which was rolled over in May and was then settled at $540/tonne CFR for June loadings, with the market sentiment overall in agreement on its downward movement.
Beyond the upward direction of the refilling period there is some uncertainty in the market over how the current natural gas curtailment in Trinidad, which had been as low as 10% over the quarter but now stands at 30%, will impact the volumes available for those fill needs forthcoming.
In addition there are concerns over how the political unrest in the Ukraine might impact producers in the Black Sea region and the volumes they intend to send to the US.
Updated to Q2 2014
ICIS reports on ammonia on a global basis, with reports in Europe, Asia and the US. At the same time, we are able to draw on global resources in London, Houston (Texas), Singapore and Shanghai.
In Europe, we report on the key benchmark using the free on board (FOB) spot price and also include cost & freight (CFR) prices for north Africa and northwest Europe (NWE).
In the Asia section, we have CFR prices for India, Taiwan and Korea. Throughout the week, we speak to a wide range of people – including producers, consumers and traders – in order to obtain a broad range of accurate information for our subscribers. All of our reporting is backed up by a strong methodology.
ICIS collects pricing data on a wide range of chemical, energy and fertilizer products, including The Outlook Ammonia. Our extensive experience in price reporting means we can offer you access to historical data dating back more than 20 years for certain commodities.
Our time series of pricing data enables you to build and model trends, to get a view of where markets might be heading. The data service includes charting functionality, allowing you to chart and download multiple data series for manipulation in your own internal models. You can also export data to Excel via the ICIS dashboard service.
ICIS price assessments are based on information gathered from a wide cross-section of the market, comprising consumers, producers, traders and distributors from more than 250 reporters world-wide. Confirmed deals, verified by both buyer and seller, provide the foundation of our price assessments.
Our in-depth market knowledge drives our specialist focus, as we recognise the importance of individual market dynamics and not a one-size-fits-all approach.
Over 25 years of reporting on key chemicals markets, including Ammonia, has brought global recognition of our methodology as being unbiased, authoritative and rigorous in preserving our editorial integrity. Our global network of reporters in Houston, London, Singapore, Shanghai, Guangzhou, Mumbai, Perth and Moscow ensures unrivalled coverage of established and emerging markets.