ICIS provides independent and unbiased pricing information, news and market analysis for the global Ammonia market. Our network of price reporters, based in Asia, Europe and the US, deliver local insight for each of these markets, which is published in our individual weekly and daily price reports.
If you buy or sell Ammonia or related products, our reports, news and market intelligence will give you the prices and analysis of the factors driving the prices that you need to make confident commercial decisions.
Updated to Q4 2019
The unexpected and lengthy shutdown of Yara’s 850,000 tonne/year export-oriented Pilbara plant in Western Australia gave the Norwegian major several headaches, forcing it deep into the spot market to cover contract commitments across the region. However, cargoes were successfully sourced on a FOB basis from rival producers in Indonesia, Malaysia, and Saudi Arabia, with SABIC also supplying a CFR Thailand cargo. Yara’s urgent requirements soaked up most of the excess volume in the region.
End-user spot demand was mainly focused on South Korea and China, with several deals struck during the final few months of the year. In addition to signing long-term contracts for up to 800,000 tonnes for loading in 2020, LFC secured 23,500 tonnes from Indonesia’s Parna Raya. The same manufacturer also sold a similar volume to China’s Gemoil, with BASF’s Chinese operations receiving spot volume from the likes of PETRONAS. Several swaps between traders also occurred.
Despite scheduled and unscheduled plant shutdowns in parts of the Americas during the final few weeks of 2019, ammonia supply to European consumers remained stable. Other units across the Atlantic and in north Africa ran at decent rates and no upward price pressure was seen. Yara and CF Fertilisers UK struck several spot deals for material for the Norwegian group’s downstream operations, while Nutrien sent a US cargo to Belgium amid turnarounds in Trinidad.
Seasonal slowdowns meant spot activity was limited, and prices for cargoes heading to NW Europe mainly unchanged. Poland’s Grupa Azoty received spot material from Trammo at Police, while a longer than expected turnaround at Italy’s Ferrara plant meant extra import volume was needed along the coast at Ravenna. Spot parcels were also sent to Greece by Trammo, while Yara secured FOB volume for Germany on several occasions from a British manufacturer.
Planned and unplanned plant shutdowns in the US Gulf and the Caribbean created some constraints, although weak domestic demand meant any inflationary pressures were negligible. Nutrien carried out maintenance on several of its 550,000 tonne/year units in Trinidad in a move that saw it enter the spot market several times. There were unscheduled outages in late December at Incitec Pivot Limited’s Waggaman plant and OCI’s Beaumont unit, while Yara permanently ceased operation of its smallest Trinidad plant.
Months of bad weather meant demand from the crucial domestic agricultural sector fell notably year on year. Unfavourable conditions saw farmers unable, or unwilling, to enter soaked fields and apply ammonia, either switching crop inputs altogether, or reducing the volume of NH3 applied. Rather than cut capacity, major producers like CF Industries instead kept units running and targeted foreign markets via a series of spot sales to market players including Trammo, Koch, and Nutrien.
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Ammonia is one of the main sources of nitrogen in fertilisers, as it contains 82% of nitrogen (N), which is essential for the life of plants. Ammonia (NH3) is produced through a chemical reaction (electrolysis).
Ammonia is a colourless, highly water-soluble gas with an intense, pungent, suffocating odour. It is alkaline and caustic, corrosive to copper and galvanised surfaces and is a powerful irritant. It is soluble in chloroform, ether and is easily liquefied under pressure. Liquid ammonia will attack some forms of plastics, rubber, and coatings.
Ammonia’s major use is as a nitrogen source in fertilisers where it is both applied directly and used to produce derivatives including ammonium nitrate, urea, ammonium phosphates and ammonium sulphate.
Urea plants are integrated with ammonia production as they require the carbon dioxide by-product from ammonia units.
Ammonia also has a number of industrial end uses. Ammonium nitrate is used to make explosives while the medical grade is decomposed to nitrous oxide (laughing gas). Ammonium bicarbonate has applications in baking powder formulations, in fire extinguishers and as a blowing agent in the manufacture of polymers.
Ammonia is used in the production of hexamethylene diamine (HMDA) for nylon, acrylonitrile (ACN) for fibres and plastics, caprolactam for nylon, isocyanates for polyurethanes, and hydrazine.
Other uses for ammonia include as a refrigerant, a cleaning and bleaching agent, and a household cleaner. It is also used in metal treating operations.
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