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Nitrogen+Syngas 371 May-Jun 2021

31 May 2021

Price trends

Price trends

Market Insight courtesy of Argus Media

NITROGEN

Ammonia prices made further gains east of Suez as steady demand from east Asia continues to support pricing. But production is improving across all key supply regions and fundamentals suggest the end of the price rally may be in sight. Saudi Arabian producers Sabic and Ma’aden both brought capacity back online towards late April, which should bring the region back close to normal capacity by May. But it is unlikely much spot will be available until June which is keeping near term sentiment firm.

In the west, there are some signs that the market may have plateaued. Seasonal demand is winding down in the US and Europe in the fertilizer sector, alongside a potential slowdown in industrial demand in northwest Europe. There is a growing list of offers for spot cargoes, from Egypt to Mexico, and expectations are that the Tampa contract price will not post any further gains in May.

A Pivdenny loading cargo will load in April for South Korea, a result of the recent supply crunch in the Middle East. Improved supply is also opening up the possibility of Trinidadian cargoes moving east to South Korea, with prices now providing a potential arbitrage opportunity for June delivered cargoes.

Recent market drivers include Taiwan buying May cargo and Saudi Arabia restarting two plants.

For urea, firmer prices for Chinese product provided some welcome reassurance to the market in mid- to late April, with asking prices moving back up towards $340/t f.o.b. for May. Reduced production, stronger domestic demand and anticipation of a large Indian tender contributed to the rise.

In the United States, strong demand for spring sowing has lifted barge rates at NOLA to above $400/t, and supported buying from North Africa. Rising water levels mean that barges are able to transit the upper Mississippi River again.

The other move in mid to late April came in North Africa, where small sales in the low-$330s/t f.o.b. were followed by larger tonnages sold at $340-344/t f.o.b. for May. An estimated 300,000 tonnes of urea have been sold from the region in mid-April. This should set a level for Europe and bring buyers elsewhere, who have been hesitating, into the market.

The next support will come from India when a delayed tender is held for May/early-June shipment, likely in the first week of May. Reduced production in India is raising the import requirement and sources expect MMTC to seek more than 1 million tonnes of urea in the tender. India is forecast to have another good year for urea imports in 2021, possibly buying up to 9 million tonnes this year. Recent market drivers include China, India and market fundamentals. n

Table 1: Price indications

END OF MONTH SPOT PRICES

natural gas

ammonia

urea

diammonium phosphate

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This issue of Sulphur magazine contains a preview of CRU’s Sulphur + Sulphuric Acid conference in Woodlands, Texas, which is being held from November 3rd to 5th this year, giving delegates the opportunity to meet and discuss some of the trends which are continuing to change the sulphur and sulphuric acid industries. Some of this is echoed in our editorial coverage this issue; the rise of electric vehicles and the continuing electrification of society is changing demand for metals and impacting upon both sulphur and sulphuric acid markets alike. As CRU’s principal analyst Peter Harrison discusses on pages 36-37, battery demand for nickel is leading to a surge in new nickel leaching capacity in Indonesia which is drawing in greatly increased volumes of sulphur, while rising demand for copper is leading to additional volumes of smelter acid from China, India and Indonesia which are impacting the merchant market for acid, as detailed by CRU’s Viviana Alvorado on pages 38-40. In the United States, new lithium mines will require additional sulphur (see pages 22-23). Rare earths and battery metal recovery will form a major topic on the first day of the Sulphur + Sulphuric Acid conference, with speakers from Lithium Americas, one of the pioneers of the new US lithium industry.