Editors Mike Nash, mike.nash@icis.com, Heng Hui, hui.heng@icis.com

 NOTE: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.

EUROPE:

Tighter supply from various origins and strong demand continued to push ammonia prices upwards, but concerns were emerging that prices were moving up too quickly. Business was reported to have taken place at around $390/tonne FOB Yuzhny while offers had risen to $400-410/tonne FOB, $100/tonne higher than just a month ago. At $400/tonne FOB Yuzhny would move out of line with the Tampa price for March, but further increases were expected in the US prices over the next few weeks.

In Yuzhny, it emerged that Nitrochem purchased 5,000 tonnes of OPZ ammonia to fulfil the Gas Snapper at $385/tonne FOB late last week. The Gas Snapper loaded in Yuzhny this week for shipment to BASF/Belgium. Nitrochem had to buy the tonnes because it did not have sufficient Togliatti ammonia to load at the port.

Producers were looking for $400-410/tonne FOB for new business and expected these price levels to be realised soon. Bids were around the $390/tonne FOB mark, with some business reported to have been concluded at this level and reportedly slightly higher. Yara priced its March tonnages earlier at $350/tonne FOB and below.

The representative price for Ukrainian ammonia was understood to have been set at $325-355/tonne FOB for the first half of March. The price for the second half of the month had yet to be set, but was expected to be a minimum of $355/tonne FOB.

Gorlovka was currently pumping around 60 tonnes/hour down the pipeline after loading the Marycam Swan that sailed for Turkey and Israel. The vessel was expected to return to Yuzhny later in the month. The Courcheville was expected to load in Yuzhny in March, but was now on its way to Ventspils. Gorlovka has another 10,000 tonnes of ammonia to sell for end-March/early-April shipment and was currently in discussions with traders. Gorlovka expected to restart its granular urea plant on 5 March and may have less ammonia thereafter.

OPZ restarted its second ammonia unit early this week, but the other unit is expected to be closed for a revamp soon, having been running all winter. However, the dates were not determined and some speculated that both plants may run for an extended period of time to increase merchant ammonia for export, given current prices. Both urea units continued to run.

Togliatti was pumping 100 tonnes/hour down the pipeline to Yuzhny at the moment, but this will increase to 160 tonnes/hour at the end of the week. However, there were rumours of production problems, which may not allow this. Nitrochem has five vessels in the line up for March, although the second Touraine may slip to April. The Clipper Mars may load for Europe rather than the US.

Ukrainian President Viktor Yanukovych will discuss gas issues with the Russian leadership during his visit to Moscow on 5 March. He said that the price of natural gas supplied to Ukraine by Russia must be fair and the issue should be discussed in a broader context involving Ukraine’s access to Russian and Central Asian gas deposits and the creation of a gas transportation consortium to manage the Ukrainian gas pipeline network. During his election campaign, Yanukovych said he would seek better terms for Kiev in gas contracts signed with Russia last year.

In February, 143,358 tonnes of ammonia were shipped from Yuzhny, down slightly from the 148,058 tonnes shipped in January 2010. Russian shipments totalled 104,614 tonnes, down from 118,906 tonnes, while Ukrainian exports amounted to 38,743 tonnes, up from 29,152 tonnes the previous month. Shipments totalled 114,737 tonnes in February 2009. Year to date exports amount to 291,416 tonnes, compared to 186,873 tonnes in the same period last year.

In Ventspils, supply was tight with most availability already committed for March shipment. Total March availability was estimated around 60-70,000 tonnes. Togliatti was still railing product to Ventspils for shipment to Belgium, although no vessel had been fixed yet.

There were unconfirmed reports of March business having being concluded in the $380s/tonne FOB. Eurochem was now offering at $405-415/tonne FOB, but no sales were reported at this level.

The Courcheville was on its way to Yuzhny and was due to load 15-16 March for Trammo. Trammo was expected to load another cargo later this month. Yara was understood to have booked around 30,000 tonnes for March shipment to NW Europe.

In Sillamae, Acron said it had about 8-10,000 tonnes for March loading. Yara was taking 4,000 tonnes under formula. The Coral Ivory was due to load 6-7 March.

In France, GPN was understood to be in the market for a mid-March cargo.

ASIA:

In India, Qafco agreed a price of $390/tonne CFR with 60 days’ credit with Zuari and MCFL for the tonnes being delivered on the Almajeeda. The vessel was eta Goa 5-6 March to deliver 3,000 tonnes and will then deliver 5,000 tonnes to Mangalore. The vessel will then sail to Paradeep to deliver 6,500 tonnes to PPL under its long term agreement with Qafco.

Mitsui agreed a price of $383.50/tonne CFR with 60 days’ credit with CFL for 10,000 tonnes of ammonia delivered to Vizag on the Gas Oriental on 2 March. The vessel will then deliver 10,300 tonnes to PPL/Paradeep on behalf of Qafco and then 3,000 tonnes to Zuari/Goa under its long term agreement with Qafco priced at $382.50/tonne CFR with 60 days’ credit.

Sabic was understood to have agreed a price of $371/tonne CFR with 60 days’ credit with GSFC/Sikka and $377/tonne CFR with 60 days’ credit with Hindalco/Dahej for the tonnes delivered on the Rose Gas in late February.

In Korea, the Gas Columbia was delayed slightly and was now expected to deliver 13,000 tonnes to SFC for Mitsubishi on 5 March. SFC expected to receive 23,000 tonnes from Mitsui in late March, possibly on the Gas Oriental. There were also indications that SFC might receive 15,000 tonnes from Mitsui on the Gas Millennium at the end of March.

SFC expected to receive 10,000 tonnes of Saudi ammonia on the Rose Gas on 20 March after the vessel delivers 13,000 tonnes to Namhae on behalf of Mitsubishi. This was the only shipment Namhae has for March. Namhae’s next scheduled shipments are 23,000 tonnes ex-Australia from Yara in early April and 23,000 tonnes from Mitsubishi in late April.

In Taiwan, an earthquake measuring 6.4 on the Richter scale hit Kaoshiung county on 4 March, but no impact on chemical production was reported. TFC received 15,000 tonnes of Malaysian ammonia from Sabic on 3 March. TFC expects to receive another cargo from Sabic in late March/early April.

CPDC was due to receive 14,500 tonnes of Indonesian/Bangladeshi ammonia from Mitsui on the Jag Viraj on 10 March. CPDC expected to receive another 5,000 tonnes from Mitsui 10-12 March. Formosa expected to receive 8-9,000 tonnes from Mitsubishi at the end of March.

The Bunga Kemboja was expected to load a cargo next week in Malaysia for shipment to Thailand. The vessel will then return to Kerteh to load 16,500 tonnes 15-18 March for shipment to east coast India.

In Indonesia, Mitsui was understood to have purchased around 10,000 tonnes from Kaltim at $400/tonne FOB for second half March loading. The KPA plant was reportedly undergoing a maintenance turnaround for three weeks.

It was understood that Petrokimia Gresik had yet to make a purchase for March delivery.

($1=€0.74)

This week on ICIS news ( www.icis.com ):

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