Price Trends

Market Insight courtesy of Argus Media

NITROGEN

Ammonia prices dropped again towards the end of April across several regions, backed up by a $55/t drop in the latest monthly Tampa contract price, as the market continues to work towards its floor. Yara agreed the Tampa price with Mosaic at $380/t c.fr for May, representing a Caribbean netback of around $330-335/t f.o.b. But firmer demand from northwest Europe appears to be pointing towards some potential stability.

A series of outages and plant maintenance in the Americas and north Africa is moving the market more into balance for May and June. In the east, the focus remains on China, where negotiations are now heading below $300/t c.fr and increasing competition between Middle East and southeast Asian sellers to reduce stockpiles.

Recent market drivers include NW European demand; fresh sales are emerging in Europe. Discussions were below $400/t c.fr at the end of April, but a sale into France was reported above $400/t cfr. The details were not confirmed by the buyer. There are also curtailments on Trinidad; at least one plant on Trinidad has been forced to come offline because of issues over gas supply.

In Algeria, producer Sorfert has brought one plant offline today for maintenance, with the plant expected to come back online in mid-May. Algerian exports reached over 130,000 tonnes in April.

In China, storage tanks at Zhanjiang are at full capacity, delaying cargoes and dampening recent buying interest. Around 70,000 tonnes are in the May line up, down from 120,000 tonnes in April.

Scarcity continued to drive prompt urea prices higher in some markets at the end of April, though sentiment remains weak for June cargoes. The US market remains short on urea at the front end of the curve and prices spiked to reflect this. Nola barges traded up to $450/st f.o.b. ($490/t c.fr) for April, up by 55% from this year’s low-point. Southeast Asia remains short on urea amid planned and unplanned turnarounds and a cargo traded at around $345/t f.o.b., up by around $20/t on last business.

In Europe, producers began the ‘new season’ campaign for summer AN/CAN shipments into western Europe with apparently strong uptake. This, in turn is driving interest in urea and ammonium sulphate – though little activity on UAN as much was traded earlier.

Recent urea market drivers include the ongoing rally in the US, which continues to prompt short-covering and adjustment of shipping schedules but, when demand slows in May this will likely cool global markets and traders are already positioning around this. In China spot export trade in urea is picking up, albeit slowly, which should place a clear ceiling on urea prices.