The Outlook Ammonia is published monthly and covers the global market. Our reliable and trustworthy report gives detailed news and analysis on key drivers, price forecasts, demand and supply patterns, deals and visual data, as well as any other pertinent factors influencing the market at the time of publication. This information can allow you to make informed business choices by keeping you abreast of price movements that are likely to impact short-term trades and strategies over the next 12 months. These are produced by Integer Research on behalf of ICIS.
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The Outlook Ammonia: Market overview
Updated to Q4 2017
With the scheduled shutdown of the SAFCO 4 ammonia plant in late September for almost the whole quarter, spot ammonia availability in Saudi Arabia remains extremely limited. Ma'aden maintains its stocks are limited, meaning Trammo and Mitsubishi had to look elsewhere. The former will load 15,000 tonnes from PIC in late October priced at $270/tonne FOB Sitrah/Shuaiba, while at around the same time the Japanese trader will lift 40,000 tonnes from Louisiana after agreeing a deal with CF Industries at $224/tonne FOB Donaldsonville.
Traders and producers noted a strong uptick in demand from spot buyers in India for October and November deliveries, with IFFCO/Kandla even taking the unusual step of securing a Caribbean spot cargo from PCS for mid-October delivery to the west coast. Buyers on both coasts of India have been heard in the market, with LFC Korea also likely to secure a November cargo amid strong demand from the group's downstream customers.
Russian ammonia producers are bullish about their prospects for the final few months of 2017 as a supply squeeze east of Suez increases competition for spot cargoes. URALCHEM was heard targeting above $300/tonne FOB (free on board) Ventspils for late October and November spot business, having agreed a sale at $270/tonne FOB Ventspils with OCI – a deal that pushed the NW Europe price to around $310/tonne CFR (cost & freight).
With limited loading availability in Algeria due to problems at Sorfert, traders are expected to lift cargoes from Egypt and Trinidad to fulfil contractual obligations in Europe and North Africa. Spot demand from Turkey remains strong and Ameropa is expected to conclude business on a regular basis having sent several cargoes to the country during the third quarter.
Without further production disruption the manufactured and delivered volumes are expected to stay consistent.
If harvest yields continue to show an increased trend, despite pricing being under pressure, demand should be on an upward trend fueled by a lower farm gate price and potential for beneficial weather post-harvest.
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The Outlook Ammonia news & analysis
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The Outlook Methodology
About The Outlook Ammonia
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). Most of the world’s ammonia production is based on the Haber-Bosch process which was developed by BASF in 1910.
It involves the reaction of hydrogen and nitrogen in the presence of a catalyst under high temperatures and pressures. The hydrogen is usually obtained by the steam reforming of natural gas (methane) but can also be made from the partial oxidation of naphtha and the gasification of coal. The nitrogen is usually obtained by the liquefaction of air.
This reaction requires a large amount of energy and, nowadays, this is provided mainly in the form of natural gas, as it is the most economic, but there are still some ammonia plants, for example in China and Japan, which operate based on naphtha and coal.
Since the 1970s, the production of ammonia, which was born in Europe, has gradually migrated to countries rich in cheap natural gas, such as Russia, Ukraine, Trinidad, Libya, Algeria, Egypt, the Arab Gulf and Indonesia .