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Ammonia Prices Drifted below Their 5-Year Lows Last Week

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Ammonia prices fell

For the week ended August 5, 2016, ammonia prices continued to remain mostly negative across various points (MOO). Ammonia is the fundamental fertilizer for various nitrogen and phosphate products.

Read about the performance of CF Industries (CF), a large nitrogen producer, in our series CF Industries’s 2Q16 Earnings, Stock Price, and YTD Performance.

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North America

For the week ended August 5, 2016, weekly average ammonia prices moved sideways to negative week-over-week at four price points in North America.

At Tampa, ammonia fell by an average of 4.3% to $270 per metric ton CFR (cost and freight), from $282 per metric ton a week ago.[1. Using the average prices for the week ended August 5 over average prices for the week ended July 29] Ammonia prices hit a five-year low of $270 per metric ton last week.[2. Five-year period from November 2011 to July 2015]

At the US Gulf NOLA (New Orleans), ammonia prices fell by an average of 4.2% to $275 per metric ton CFR week-over-week. Prices at this point were also at a five-year low of $275 per metric ton last week.

In contrast, the average weekly ammonia prices at Southern Plains were trading flat last week. They were $340 per short ton ($308 per metric ton). Average weekly ammonia prices at the Corn Belt of North America were also trading flat. Average weekly prices stood at $415 per short ton ($376 per metric ton). Prices at the Corn Belt were also at their lowest point in the last five years.

YoY (year-over-year) prices at the above four points have fallen by an average of 35%. This should explain the weak performances of nitrogen companies such as CF Industries (CF), CVR Partners (UAN), Terra Nitrogen (TNH), and PotashCorp (POT).

Outside North America

Last week, average ammonia prices outside North America fell. Ammonia prices in the Middle East fell by 3.5% to an average of $280 per metric ton free on board week-over-week, down from $284 per metric ton.

Average weekly prices in the Black Sea fell by 2.8% to $208 per metric ton from the previous week’s average of $214 per metric ton. Similarly, in Western Europe, average weekly ammonia prices fell by 2.2% to $268 per metric ton CFR from an average of $274 per metric ton a week ago. At both points, ammonia prices hit their five-year lows of $200 and $260 per metric ton CFR, respectively, last week.

The prices at these three points in the international market fell by an average of 40% YoY, respectively.

In the next part, we’ll look at urea prices.

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