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Nitrogen+Syngas 382 Mar-Apr 2023

31 March 2023

Price Trends

Price Trends

Market Insight courtesy of Argus Media

NITROGEN

Ammonia prices slumped to 22-month lows in several regions in early March, driven by fresh spot sales in both east and west of Suez in the low-$500s/t c.fr. Global supply continues to heavily outweigh demand because of weak downstream demand and high stock levels across key consumption regions.

On the demand side, the rate of seasonal ammonia demand from the US, Europe and India, which usually drives sentiment at this time of year, remains uncertain. And high stock levels persist, keeping spot demand relatively absent from the market at current price levels. In the Middle East, prices have dropped over $300/t since the beginning of the year, and are not expected to stabilise unless further production is curtailed in competing regions.

Some recent sales have given an idea of market direction. In Turkey, Trafigura has sold 10,000 tonnes to a buyer in Samsum for 1H-April delivery at $520/t c.fr, via trading firm Hexagon. Trammo has sold 2-3 cargoes for prompt delivery to Turkish buyers over the last few weeks. Prices are reported to be in the low $500s/t c.fr. A trader has also reported a sale of 5,000-7,000 tonnes into Taiwan at around $550/t c.fr, dropping prices $90/t on the previous week. In China, producers say a number of turnarounds at domestic ammonia plants in March have led to some supply shortages and a rise in domestic prices. A purchase was reported into Zhanjiang at $680/t c.fr, but traders do not expect import demand to pick up in earnest until late-2Q 2023.

Table 1: Price indications

Prices also fell in most urea markets in early March as suppliers continued to chase limited demand. India’s purchase tender has yet to formally conclude but it appears IPL will book 1.15 million tonnes of urea at $330-334.8/t c.fr, with supply dominated by traders sourcing from Russian and Middle Eastern producers. Prices in the Americas fell following the India tender to around $320325/t c.fr in both the US and Brazil. European prices stabilised on steady demand at retail level for spring applications, supporting Egypt and Black Sea prices around $390403/t f.o.b. But these relatively high price levels in Europe have again pulled supply in from outside the region, particularly from the Middle East and Nigeria.

Sentiment at the Argus Asia conference in Dubai, on March 7th-9th was generally bearish regarding the outlook for nitrogen prices into the second half of the year, largely on the basis of the structural oversupply evident in the urea market. Importers in several markets are still buying last-minute and smaller than usual tonnages, driving a premium for prompt tonnes in Europe but overall softening markets. While supply in Europe has increased, tracking falling natural gas prices, fertilizer prices are again approaching levels of marginal profitability.

END OF MONTH SPOT PRICES

natural gas

ammonia

urea

diammonium phosphate

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