The long-anticipated new-season UK ammonium nitrate prices were unexpectedly released this week, says Gleadells Fertiliser Manager, Calum Findlay. Both Yara and GrowHow released new terms three weeks earlier than the normal launch at Cereals, he adds.
For some, this has meant that early tonnes can be booked and levels locked in at nearly 30/t lower than last year. The early release of these prices caught importers of ammonium nitrate by surprise, leaving many with old-crop stock, which has now been liquidated in order to clear positions.
New imported levels for June were also released this week for both Lithuanian and Polish material. For both UK and imported product, there is only a small allocation for June delivery. We expect that the June tonnage will soon run dry and price increases are extremely likely for next week.
The global urea market has taken an upward climb for new season. This swift increase comes on the back of national gas supplies in Egypt being cut for the coming weeks. Alexfert (a major producer) supposedly received a letter from the government yesterday stating that they will not receive national gas in the coming weeks.
The Egyptian supply has been set at 400,000mt for delivery up to the end of September. Gas makes up nearly 90% of urea production and without gas, supply will become tight, pushing prices higher as demand increases. Demand from the energy sector has risen from 7% to 15% over the past two years, adding to the shortage in gas. Prilled urea prices still remain high and are likely to increase further, he comments.