Limited AN supply sees further move to urea
© Tim Scrivener Ammonium nitrate (AN) supply is very limited, with no new prices for UK-manufactured product expected by traders any time soon.
Merchants estimate that 60-70% of nitrogen requirements for use by the end of spring 2023 have been ordered.
Deliveries by CF Fertilisers continue well behind eschedule and, as a result, one trader said they were expecting no new terms from the firm this side of Christmas.
See also: CF to halt ammonia production at Billingham and import supply
The manufacturer is understood to have begun ammonia imports, following its announcement in late August that it was ceasing ammonia production at Billingham on Teesside because of high gas prices.
Midweek there was a limited offering of imported AN, both Lithan and Pulan, at anywhere between £850/t and £900/t. The weak pound is challenging the nerve of importers at this stage in the season – farmer demand is slow and with importers in a tight cash and credit position, supply is expected to remain limited. Â
The switch from AN to urea continues, mainly on price, but also influenced by availability.
Fertiliser update (£/t delivered September/October 2022*) |
|||||
| UK 34.5% N |
Imported AN |
Granular urea 46% N (untreated) September- February |
Potash MOP | Phosphate DAP | Phosphate TSP |
| n/a |
£850-£900 |
£850-£860 | £750-£760 | £1,000 | £850-£860 |
| *Unless otherwise indicated. Prices based on full loads, cash payment, 28-day terms. | |||||
The urea market is very sensitive to supply and demand, and an Indian tender for almost 1m tonnes of product pushed up prices last week, along with some other big trades.
Prices have since settled, with the expectation that shippers will come back into the market, firming prices again into the final quarter of this year.
Midweek, offers were mainly in the £850-£865/t range, with the expectation of another £20/t being added within a couple of days because of the weak pound.
Protected urea, treated with urease inhibitor to limit ammonia emissions, is generally priced at £40/t over the conventional product, though some offers add £50/t for the treated version.
Some mid-sized and smaller traders are being asked for cash up front for urea imports, raising the risk to unacceptable levels for some.
Reduced demand for phosphate and potash has steadied prices, which have moved little in the past month. However, the weak pound is keeping these products at elevated levels.