Dutch OCI reports ammonia sales up 40% in third quarter

Dutch nitrogen giant OCI reported 40% increase in third-quarter ammonia sales as the company sourced record volumes from its Middle East subsidiary and the US into Europe, the company said Nov. 8.

In both Europe and the US, "significantly higher gas prices" during the quarter cost the company an additional $103 million and $32 million, respectively, OCI said in a statement about its earnings.

OCI weathered the higher production costs by sourcing record volumes of ammonia from its UAE-based Fertiglobe subsidiary and increased imports from the US to its Dutch operations, the company said.

The company reported own product ammonia sales of 542,400 mt during the quarter, up 40% from the year-ago quarter, and traded 65,000 mt in third party ammonia, it said.

Sales prices averaged $654/mt for Northwest Europe during the quarter, up from $235/mt during the year-ago quarter.

S&P Global Platts assessed the CFR NW Europe duty-free price at $845/mt Nov. 8 down $5/mt from Nov. 5. Fertiglobe reportedly sold the last reported cargo into Northwest Europe, a 15,000 mt vessel reported at $905/mt.

Fertiglobe also has recently announced a 70,000 mt scale up of blue ammonia capacity at a plant in the UAE and is partnering with the Abu Dhabi National Oil Co. to sell blue ammonia into Japan.

In the medium term, OCI said continued structural tightening in markets is expected with fewer net capacity additions and higher industrial demand.

"Further, there is significant upside for ammonia from the expected incremental demand for clean ammonia in new applications across a range of sectors including marine fuel and power, and as a hydrogen carrier," OCI said.