Regional supply glut prompts latest cut in Caribbean ammonia capacity

Author: Richard Ewing

2020/07/10

LONDON (ICIS)--Only a handful of spot deals were confirmed in the international ammonia market, leaving the latest capacity cut in Trinidad as the main talking point.

Trinidad Nitrogen Company Limited's (Tringen) 500,000 tonne/year plant will go offline in August for an undisclosed period, just weeks after Canadian giant Nutrien idled a pair of 600,000 tonne/year units on the island.

Although the Tringen I shutdown was postponed from this month after new export opportunities emerged, those openings were not immediately identified by the manufacturer or joint venture partner Yara.

Major international trader Trammo late on Thursday dismissed market talk it was targeting the Caribbean volume for discharge in Asia Pacific, Latin America, or Europe.

The supplier loads around 50,000 tonnes/month from Trinidad on 23,400-25,000 tonne capacity vessels, but is in talks over a potential time-charter on a 40,000 tonne capacity tanker.

There are also suggestions Norway's Yara may look to bring more material across the Atlantic to its European operations, or sell the volume itself on a spot basis.

The Oslo-headquartered group appears to have secured a 25,000 tonne spot cargo of Russian material from long-term supply partner EuroChem after the LPG tanker Yukon arrived at Glomfjord, Norway on Friday.

Neither of the fertilizer majors has confirmed whether the cargo involves a spot sale or is a freight arrangement, but in April EuroChem sold a slightly smaller spot cargo to Yara for discharge at the same port.

No new spot sales were heard out of Algeria, Egypt, or the Black Sea – where pumping of Russian volume from Togliatti and Rossosh to the Port of Yuzhny will come to a halt between 31 July and 4 August for repairs on a key pipeline.

Despite the market being tighter east of Suez, spot activity was greater, even though the major Middle East manufacturers are sold out for the next few weeks.

Trammo sold a combined 24,500 tonnes to buyers in India for prompt discharge by the LPG tanker Marola.

The vessel delivered around 5,000 tonnes of Saudi material to Greenstar Fertilizers at the southern port of Tuticorin on Thursday, and is now heading to the east coast port of Paradip with 19,600 tonnes for Indian Farmers Fertiliser Cooperative (IFFCO).

On India's west coast, Fertilisers and Chemicals Travancore (FACT) issued a new purchase tender for a 7,500 tonne (+/- 5%) cargo for early August delivery to Kochi (Cochin).

The enquiry, which closes on 13 July, comes a week after FACT scrapped its 29 June purchase tender for a similar-sized cargo for late July delivery to the same port.

In northeast Asia, Japanese traders Mitsubishi and Mitsui agreed a formula-priced CFR (cost and freight) spot deal involving an imminent 10,000 tonne delivery of Indonesian product to China.

Mitsui has been highly active in the southeast Asia spot market in recent weeks due to a two-month plant turnaround at Indonesian supply partner Pupuk Kaltim that is not scheduled to end before mid-August.

In the US, CF Industries sold a 25,000 tonne FOB (free on board) spot cargo to Trammo at an undisclosed price for lifting from the Louisiana port of Donaldsonville this weekend for discharge in Chile.

The volume is the first export cargo sold by a US producer since early February, when the same pair agreed a deal for a cargo that also ended up in Chile.

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