Ammonium nitrate price rockets in GB

By Roger Chesher

IN a dramatic turnround to a slow season of rock-bottom fertiliser prices, the price of ammonium nitrate has now rocketed everywhere except Ireland.

With fertiliser stockpiles now cleared, shutdowns, breakdowns, strikes and closures have resulted in low nitrogen supplies throughout Europe.

Supply and demand dictate price unless political considerations come into play as in Ireland where IFI, the largest player, is largely government owned.

The last two weeks have seen a leap in AN values from 103-105/t to 113/t, and Terra have now publicly declared a forecast of 120/t minimum by June, the end of the fertiliser season.

At these prices, movement is slow, but most farmers are now supplied with their immediate needs.

But, this means that the price of after-cut fertilisers (a blend of AN prills and potash), will hold up when this market shortly starts to swing into action.

In Ireland, the strong Pound against the Punt (IR1=UK0.758 today) is holding prices back as CAN and compounds flood across the border from south to north.

The price in the south, where the market is dominated by IFI, seems artificially low compared to Western Europe.

Liquid fertiliser users have a good deal at present where prices, although very variable, currently lag behind solid.

This wont be for long, and with most liquid deals completed, product is currently in low supply.

Compound prices are also creeping up, but not as rapidly as AN.

Current deals are nearly all on a cash basis, i.e April delivery, pay May.

After such a long period of depressed prices it is hard for fertiliser users to remember that this is simply a return to something approaching a “normal ” price. There could be some more upward movement yet.

In refining its reorganisation plans Hydro has announced that its fertiliser production and marketing division will be merged into a single unit called Hydro Plant Nutrition.

This change will enable the company to save another 500-700 jobs.

In a partial reversal of its earlier announce the company has decided to continue production of NPK fertiliser in France.

The French government authority has indicated that a complete shut down of production would introduce costs not anticipated by hydro at the time of its initial announcement.

Contrast this with the ease in which a modern and efficient plant can be closed down in Britain at Immingham.

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