US Gulf becomes lowest-price blue ammonia delivery region

Blue ammonia prices were mixed in May, with prices in Asia rising by 13% and losses in Northwest Europe and the US, which became the cheapest region globally, S&P Global Commodity Insights data showed.

Platts, part of Commodity Insights, assessed blue ammonia CFR US Gulf Coast at an average $471/mt in May, down 6% and the lowest since February.

Blue hydrogen CFR Far East Asia averaged $476/mt, while Northwest Europe remained the most expensive region, averaging $508/mt.

Platts blue ammonia prices assessments are based on the conventional ammonia market price plus a premium reflecting the costs of carbon capture and storage.

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 after falling the previous 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 $905-$1,056/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.

Conventional ammonia markets

In conventional ammonia markets, the Tampa ammonia contract price reached a nine-month low, driven by soft US demand and lower-priced spot sales in Morocco.

Yara and Mosaic agreed on a new contract price for deliveries of ammonia to Tampa in June at $400/mt CFR, $50/mt lower than the agreement for May deliveries.

The market outlook was mixed in Northwest Europe, with rising nitrates and urea prices, plus higher feedstock costs, lending some support. However, the close of the European fertilizer season put some downward pressure on prices.

The Asian market remained bullish, with the Southeast Asia spot price no lower than $400/mt FOB.

However, indications for the Far East CFR price were variable, with numbers ranging from $450/mt to $500/mt.

One trader was doubtful that buyers were willing to engage at those levels, but China-based suppliers were considering entering the market.

Infrastructure and trade development

Clean ammonia infrastructure developments continue to gather pace.

The Port of Antwerp-Bruges is working with Namibia's Namport to develop a green ammonia export terminal(opens in a new tab) at Walvis Bay.

Namibia is a potential key supplier of renewable hydrogen in the form of ammonia to Europe.

Future trade flow routes are starting to emerge(opens in a new tab), as companies sign preliminary supply agreements and ship test cargoes.

The Port of Antwerp-Bruges and Namport provisionally estimate an investment of around Eur250 million for their project, a spokesperson for the Port of Antwerp-Bruges told Commodity Insights.

"We are currently working with Namport to revise the master plan and calculate the required port infrastructure," the spokesperson said.

The development reinforced the Port of Antwerp-Bruges' European import strategy, it said.

"By being end-to-end integrated into major production hubs such as Namibia and Oman, we can ensure that access to green molecules for the European market is facilitated," the spokesperson said.

The EU is targeting large volumes of imported green hydrogen and derivatives such as ammonia, and has signed a strategic agreement with several potential export countries including Namibia.

The Port of Antwerp-Bruges and Namport signed a partnership agreement on May 2 setting out the framework for the joint development of the north port in Walvis Bay.

The partners plan to expand the port to 1,300 hectares from 105 ha at present.

Brazil export plans

In Latin America, Brazilian developers are setting their stall to become major green ammonia suppliers to Europe and elsewhere.

Brazil's Acu Port(opens in a new tab) is preparing to produce 561,800 mt/year of green hydrogen and 43,000 mt/year of blue hydrogen by 2030 for domestic and export markets.

Acu's "low-carbon hub" is also to produce 1.9 million mt/year of ammonia and 315,000 mt/year of e-methanol, officials told Commodity Insights during a visit to the port in southeast Brazil.

And green hydrogen projects being developed in Brazil's northeastern Piaui state(opens in a new tab), with total planned capacity of 22 GW, are targeting exports at below $5/kg, with production from 2028.

The Solatio and Green Energy Park projects are expected to be the first to emerge in the country, with initial investments put at Real 200 billion ($38 billion). Both projects have European backers and support from the European Commission.