Market Outlook

Market Outlook

Historical price trends $/tonne

Source: BCInsight

AMMONIA

Ammonia prices could remain stable for the duration of October, with any further increases likely to be capped by a lack of demand. The outlook for November is more positive for buyers, with prices set to ease off once turnarounds at key export hubs are concluded.

Ammonia prices have been supported through 2024 Q3 due to supply constraints in key regions, including the Middle East, the Caribbean, and North Africa. Curtailments and production slowdowns at export hubs, combined with seasonal domestic demand in the US Gulf, have led to tighter availability, pushing up prices in the short term.

Forthcoming capacity additions, such as the Taman trans-shipment complex in the Black Sea and new US Gulf capacity in 2025 Q1, are expected to pressure prices lower, especially as downstream merchant demand is unlikely to provide strong support. This could lead to further downside than currently expected for 2025.

UREA

The short term outlook remains firm despite the absence of any significant purchasing activity in Brazil or Europe and NOLA prices sliding again. The prospect of India stepping back into the market without any sign of Chinese exports resuming seems sufficient to keep the upward trajectory on track.

Upwards price catalysts were absent in 2024 Q3 – usually a peak demand period – due to cautious buyers and weather delays. However, prices maintained steady levels, with sellers able to withhold downwards price pressure through the absence of China.

Price declines are likely to continue in the medium term, despite limited capacity additions in 2024–26. This is because of excess existing capacity combined with the return of China. Prices are expected to undergo more pressure from 2027 as more capacity commissions globally between 2027–29.

METHANOL

Methanol markets have tightened due to production outages and cutbacks. Methanex has switched production on Trinidad from its larger Atlas plant to the smaller Titan unit, removing 700,000 t/a of production. Prices have moved upwards accordingly.

In the medium term however demand is expected to be boosted by higher olefin prices, boosting China’s MTO sector, a key consumer of methanol.

The port of Rotterdam has reported renewable methanol sales eight times higher than last year as shipping companies move towards greater use of low carbon methanol as a bunker fuel. In a report in September the Methanol Institute said that extensions to the EU Emissions Trading System will be sufficient to eliminate the price premium of sustainable methanol to conventional, oil-based bunker fuels, putting their costs on a comparable footing.