Market and product

The price of ammonia imported to Northwest Europe reached a three-year high March 5 as the war in the Middle East curtailed global natural gas supply.

Platts, part of S&P Global Energy, assessed ammonia CFR NW Europe duty paid/duty free at $750/metric ton March 5, up $60/mt day over day and the highest since Feb. 23, 2022.

The market saw a 15,000 metric tons ammonia spot cargo sold to NW Europe for mid-March delivery at $750/mt CFR duty free, excluding the cost of the EU's Carbon Border Adjustment Mechanism.

The spot deal reflected the tough decision European ammonia consumers now faced: whether to make or buy ammonia, market sources said.

The import price has been up to $320/mt above the cost of production in recent months, as tight global supply conditions hampered seaborne availability while TTF prices remained low.

The spread evaporated this week, with the production cost outstripping the import price March 3.

The sudden rise in input costs led European nitrogen fertilizer producers to pull offers with immediate effect, at the beginning of the spring application season.

Ammonia market sources anticipated these consumers would evaluate whether to continue using expensive gas to produce, or try to import instead.

"Everyone is scrambling for tons," a seller to the European market said.

The price of the spot deal, $60/mt higher than the last business seen in the region, was "taking advantage" of the situation, a European buyer said. However, they said it was also the new benchmark for the region.

A trader said they would not be surprised if sellers were "keeping their offers to themselves" and waiting for higher bids.

"Anybody with April tons on their hands might wait for the bulls to come out even more," they said.