Fertilizer Update: Ammonia Prices Continue Their Lackluster Streak
Ammonia as a feedstock
Ammonia is the fundamental fertilizer to other nitrogen fertilizers such as UAN (urea ammonium nitrate), as well as phosphate products such as DAP (diammonium phosphate) and MAP (monoammonium phosphate).
Ammonia prices act as a precursor to the prices of other key fertilizers. Ammonia price movements for the week ended July 8, 2016, were mixed across the markets.
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Prices in North America
The average ammonia prices in the Cornbelt region saw a 6.3% decline at $415 per short ton ($376 per metric ton) in the last week. This is compared to $443 per short ton ($401 per metric ton) a week ago.
However, ammonia prices remained unchanged in the Southern Plains of North America at an average price of $340 per short ton ($308 per metric ton) compared to the previous week. At Port Tampa Bay, the average prices of ammonia also remained unchanged from the previous week at $285 per metric ton.
Year-over-year, ammonia prices at these three points remain significantly suppressed by an average of 28%, 32%, and 38%, respectively. The lackluster pricing environment for ammonia continues to weigh negatively on nitrogen producers (MXI) such as Agrium (AGU), Terra Nitrogen (TNH), CVR Partners (UAN), and CF Industries (CF).
Average ammonia prices in the Middle East stood at $298 per metric ton FOB (free on board), a 6.9% decline from $320 per metric ton in the previous week.
On the other hand, ammonia prices in the Black Sea remained unchanged from the previous week at an average of $250 per metric ton. In Western Europe, ammonia prices stood at an average of $310 per metric ton CFR (cost and freight), which also remained unchanged from the previous week.
Year-over-year, prices at these three points in the international market are down by 26%, 38%, and 33%, respectively.
Next, let’s see how urea prices moved last week.