Global blue ammonia prices rise in July, tracking tighter conventional markets

Global low-carbon ammonia prices assessments by Platts, part of S&P Global Energy, rose in July, tracking conventional ammonia markets, which were buoyed by supply constraints on both sides of the Suez Canal.

Carbon capture-enabled blue ammonia prices in Northwest Europe -- the highest-priced delivery region -- rose 13% month over month to average $574/mt in July, with US Gulf Coast prices up 14% to $477/mt.

Prices in Far East Asia lagged, but still marked substantial gains, up 8% to $400/mt.

Platts blue ammonia price assessments are based on the conventional ammonia market price plus a premium reflecting the costs of CCS.

The Platts Ammonia Price Chart illustrates monthly averages of daily assessments for gray, blue, and "green" ammonia across a range of geographies and delivery options.

Blue ammonia is made from fossil fuel-derived hydrogen, capturing the associated CO2 emissions, while green ammonia uses hydrogen from renewables-powered water electrolysis. Assessments assume a levelized cost of renewable power input for "green ammonia".

Green ammonia cost-of-production assessments were broadly steady month over month, and tend not to vary much month over month, with cost assumptions reviewed annually.

Platts assessed delivered green ammonia costs in the range of $820-$929/mt in July, with the lowest average cost for delivery to Far East Asia from the Middle East, and the highest delivered from West Coast Canada to the same destination.

The lowest cost renewable ammonia delivered to Northwest Europe was from the Middle East, averaging $837/mt in June.

Conventional ammonia markets

Downtime in Iran and extended maintenance in Saudi Arabia tightened conventional ammonia supplies east of Suez.

Iranian ammonia production resumed in July, after a halt mid-June, triggered by the Israel-Iran conflict, but producers were reported to be running at reduced rates even at the end of the month.

It added to supply pressure in the Middle East, with Saudi Arabia's 1.1 million mt/year Ma'aden Phosphate Company plant only resuming production in mid-July following maintenance that began in early May.

Further east, heightened FOB demand ahead of the start of a two-month turnaround at the 550,000 mt/year Parna Raya ammonia plant at Bontang in Indonesia at the end of July supported prices.

West of the Suez, supply restrictions in Egypt and Algeria supported CFR pricing in Northwest Europe and FOB levels, with supplier Fertiglobe securing a part cargo in Turkey at an elevated price of $520/mt.

The influential Tampa contract price negotiated between Yara and Mosaic rose $70/mt to $487/mt for August deliveries.

Ammonia exports to the US from the world's largest supplier, Trinidad and Tobago, face duties of 15% after the Trump administration's global tariff hike took effect Aug. 7.

The US is a net ammonia importer, though it has growing domestic production capacity. US imports from Trinidad were already down 35% year over year to 358,000 mt over January to June. Shipments from the country to Europe are likely to rise, traders said.

Low-carbon premium elusive

Traders and buyers in eastern markets continued to report that no premium could be achieved for low-carbon ammonia on conventional product in Japan or South Korea.

Platts assessed the low-carbon Japan Korea Ammonia Price (JKAP) edging higher through July, tracking the conventional ammonia market in Japan, settling at $365/mt CFR by month's end. The low-carbon ammonia US Gulf Coast FOB market was assessed in line with conventional ammonia there, rising to $435/mt by the end of July from $370/mt at the start of the month.

In early August, US producer CF Industries said it would start low-carbon ammonia shipments from Donaldsonville, Louisiana, "in the coming weeks and at a premium."

It started up a CO2 dehydration and compression facility in mid-July, enabling the production of approximately 1.9 million mt/year of low-carbon ammonia.

But in Europe, blue ammonia projects continued to face difficulties. Horisont Energi, the developer of the planned 1 million mt/year Barents blue ammonia project in Norway, warned over its ability to continue operations, having struggled to secure new capital or partners.

Indian renewable ammonia tenders

India has awarded a total of 560,000 mt/year renewable ammonia supply tenders to seven different companies at a price ranging from Rupees 50.75-55.75/kg (58-64 cents/kg), as of Aug. 20.

The auctions are part of a series of 13 to supply 724,000 mt/year of ammonia to Indian fertilizer companies under the National Green Hydrogen Mission.

SECI's auctions have been instrumental in discovering some of the lowest prices for renewable ammonia globally, with the lowest price equivalent to around $583/mt.

The tenders come against the backdrop of a consolidation across the wider renewable hydrogen and ammonia market, as the most promising projects progress, while others are delayed or canceled.

A market participant involved in the renewable-derived hydrogen and ammonia sector in Latin America said this was a typical phase for emerging technologies.

"Following anticipated growth, which led to a boom, many projects in preliminary stages face challenges during subsequent phases," the source said. "Investors and developers are finding that expectations often do not align with practical outcomes, prompting a necessary reassessment of their objectives."

Electrolyzer manufacturer Thyssenkrupp Nucera CEO Werner Ponikwar said the company was "streamlining" its projects to "proceed only with the most viable ones."

In the Middle East, the company has delivered over 90 standardized 20-MW modules for the Neom green hydrogen and ammonia project, which is over 80% complete.