Tight supply drives USGC ammonia prices higher: traders

Tight supplies and bullish US demand have driven Tampa-delivered ammonia contract prices to $990/mt, trading sources said Nov. 23, with one calling the price its "highest in 33 years."

S&P Global Platts assessed CFR US Gulf Coast ammonia up $40/mt from Nov. 22, based on the December contract settlement. The settlement rose from $825/mt in November as production cuts in Europe have raised prices around the world.

"The market is heating," the trader said.

A second trader described the US market as "short and very bullish," resulting in boosted prices. "They could have gone up to $1,200/mt also," he said. "There is just no limit anymore during this fall season."

A third trader said he expected USGC spot prices would top $1,000/mt easily in the next few days.

Higher European prices for natural gas, a principal component of ammonia, has led European end-users to instead buy supplies from the US and Trinidad. However, USGC ammonia prices have gone up 48% since Platts launched the CFR USGC assessment Oct. 12.

"There is not much activity but if we could buy from the Baltics or from [the Black Sea] to sell to these markets we would certainly buy in the $800s FOB these days," the second trader said. "In the East, it is more or less the same, $800-$900 FOB in the [Middle East] is rumored and high $900s CFR in the Far East probably around the corner."

Platts assessed the FOB Black Sea price at $850/mt and CFR Northwest Europe price at $950/mt on Nov. 23. Both assessments were unchanged on the day, based on lack of market activity.