The ammonia market began 2025 with West of Suez prices edging lower, driven by a gradual improvement in global supply and a $32/t drop in the January Tampa contract, BRS Group said.
While increasing supply options in several regions were balanced by demand inquiries in Europe, particularly from the northwest, a sustained lack of spot buying interest by February added downward pressure on prices across most regions. In the Middle East, steady production and weak East Asian demand kept the region long, with lower FOB prices impacting delivered markets both east and west of Suez. 1Q25 ended with the April Tampa contract declining to $435/t cfr, down $25/t from the March settlement of $460/t cfr. Relatively tight supply from Trinidad, due to a turnaround at one of Yara's Tringen plants, has been offset by weak market dynamics and softer demand from importers in NWE, India, and East Asia.
The impact of tariffs imposed on US imports and retaliatory measures from other countries was the main topic of discussion starting the second quarter. President Trump paused all higher tariff rates above 10% that were due to come in on 9 April, so that countries could have time to negotiate their positions/higher rates. Currently all countries have a blanket 10% import rate imposed. This means, US imports of ammonia from Trinidad will face a 10% tariff, ending the duty-free access previously granted under the Caribbean Basin Initiative. Trinidad shipped roughly 220,000t to the US in 1Q25. Considering the April price of $435/t cfr Tampa, the tariff could add around $6mn to import costs. April saw weak demand from downstream markets adding pressure on prices, which continued to fall in most areas. European prices, after holding a premium for a while, have dropped to $450/t cfr, about $20/t lower, and are now more in line with other regions.
On 4 June, Yara agreed with Mosaic on a June ammonia price of $392/t cfr Tampa, which is a $23/t decline from May’s $415/t. Product-wise, multiple output reductions were implemented in May, but their full market effect has yet to materialize. Natural gas limitations in Egypt are anticipated to have only a slight effect on export volumes from Ain Sokhna. Trinidadian producers are expected to continue facing production cuts in June, yet current supply from both Trinidad and the US Gulf remains sufficient to meet contractual commitments. Ma'aden's Ammonia 1 facility in Saudi Arabia has been undergoing maintenance for nearly four weeks and is expected to stay offline through the end of June.
The short-term outlook will largely depend on how soon exports ramp up from the Gulf Coast Ammonia plant in the US, as well as the potential resumption of more shipments through the Red Sea. Both developments could help ease current logistical bottlenecks that are maintaining a delicate balance between supply and demand.