Global blue ammonia prices tread water in December

Platts delivered blue ammonia prices were little changed in December, with the market in Northwest Europe edging lower by just 1%, while US Gulf Coast prices rose by 1%.

Blue ammonia CFR Northwest Europe fell $6/mt to $671/mt, while US Gulf prices were up $3/mt to $592/mt. CFR Far East Asia prices also fell 1% to $477/mt, tracking movements in conventional ammonia markets.

Platts blue ammonia price assessments are based on the conventional ammonia market price plus a premium reflecting the costs of carbon capture and storage. Platts is part of S&P Global Commodity Insights.

The Platts Ammonia Price Chart(opens in a new tab) illustrates monthly averages of daily assessments for gray, blue and green ammonia across a range of geographies and delivery options.

Blue ammonia is made from fossil fuel-derived hydrogen, capturing the associated CO2 emissions, while green ammonia uses hydrogen from renewables-powered water electrolysis. Assessments assume a levelized cost of renewable power input for "green ammonia".

The green ammonia calculated costs of production assessments were broadly stable month over month. These are based on longer-term weighted average costs of capital and levelized power costs.

Platts assessed delivered green ammonia costs in a range of $899-$1,052/mt, with the lowest cost for delivery to Far East Asia from Australia, and the highest delivered from West Coast Canada to the same destination.

Low-carbon markers

The cost to theoretically supply low-carbon ammonia was heard in a broad range in December, with price ideas for renewable-derived product from China, India and Egypt heard at $650-$800/mt FOB.

Indicative offers for renewable-derived ammonia from Canada and Australia were significantly higher at above $1,000/mt FOB, sources said.

Producers and traders continue to emphasize it wasn't feasible to achieve a premium over conventional ammonia in practice in the current market.

The low-carbon ammonia market in Japan and South Korea was assessed in line with conventional gray ammonia in Far East Asia, reflecting the higher cost of freight from key supply hubs to Japan.

The Japan Korea Ammonia Price, a market-based CFR assessment of the low-carbon ammonia market in Japan and South Korea, was assessed at $435-$455/mt CFR in December, down from $435-$475/mt CFR in November.

The model-based Japan Ammonia Energy Substitution Index declined through December, but theoretical buyer willingness remained above the actual market.

The Japan AESI, which indicates what a power generation company in Japan may be willing to pay for ammonia as an alternative to traditional feedstocks, edged down steadily in December, peaking at $496/mt before slipping to a low of $466/mt, reflecting a decline in Japanese power pricing.

Meanwhile, the US Gulf Ammonia Price, a market-based assessment of the FOB market for low-carbon ammonia along the US Gulf Coast, was assessed on a par with the FOB market for conventional ammonia, in a range $468-$510/mt FOB, down from $500-$510/mt FOB in November and reflecting improvements in conventional ammonia supply west of the Suez Canal.

In conventional ammonia markets, FOB Black Sea netback prices rocketed in December. CFR Turkey prices rose sharply because of production disruption in Iran, pushing up prices by 20% to $490/mt FOB Black Sea.

EU rule concerns

In green ammonia markets, a project developer in Latin America expressed concerns over restrictions on electrolyzers in the EU's second renewable hydrogen production subsidy auction.

The auction parameters include "security of supply" criteria, which stipulate that only up to 25% of electrolyzer capacity at the stack level can be sourced from China.

The source said this specification could signal more stringent positions in the future, making it crucial for both current and upcoming projects, as they are consistently evaluating both Chinese and European-sourced electrolyzers for their initiatives.

The developer commented on the uncertain market landscape, highlighting several challenges in securing offtake agreements, which pose a critical hurdle for many projects in the sector.

Ammonia cracking

Ammonia cracking is getting closer to commercial realization, with industrial gases group Air Liquide aiming to start its first pilot project in Antwerp, Belgium, in the first quarter of 2025.

Ammonia cracking is expected to play an important role in both emerging low-carbon ammonia supply chains to major end-user markets in Europe, as well as potentially emerging as the marginal ton of electrolytic hydrogen supply close to major import hubs.

Dutch regulator ACM includes ammonia cracking in its hydrogen and ammonia infrastructure access regulations, which will introduce requirements for ammonia cracker operators to offer negotiated access to third parties from February.

In Northwest Europe, four ammonia cracker projects are advancing at the port of Rotterdam, while a number of other projects are advancing at the nearby Antwerp hub.