Ammonia market trapped in bear territory as supply glut bites producers

LONDON (ICIS)–The absence of key players due to national holidays in many countries kept activity in the international ammonia market relatively muted.

Sentiment remains bearish on both sides of Suez for June deliveries, although there is talk that prices may have hit a floor in the east – where contract prices in South Korea and Taiwan slipped again this week.

Increased spot availability from Ukrainian manufacturers, due to falling natural gas prices, has boosted export volumes in the Black Sea.

Trammo was involved in the majority of this week’s business, with the trader buying formula-priced FOB (free on board) tonnes in Algeria from AOA Edeola/Bahwan, and in Indonesia from Pupuk Kaltim.

The same buyer also struck similar-structured FOB deals with Ukrainian producers Dniproazot and Ostchem for a combined 15,000 tonnes for prompt loading at Yuzhny.

In addition, Trammo sent a Saudi cargo to a pair of buyers in east coast India, and appears to have concluded a similar CFR (cost and freight) sale to Turkey’s Gemlik involving Caribbean volume due to arrive this weekend.

The recent trend for swaps in Asia Pacific saw Mitsubishi, Pupuk Kaltim, and Trammo combine for various freight arrangements.

Price direction for next month should become clearer next week, when major players return to their desks and agree business for June loading.