Japanese trading house Mitsubishi has sold two spot ammonia cargoes this week at $330/t cfr to Taiwan and China respectively. This marks a significant drop from current pricing levels in Asia-Pacific.
Taiwanese buyer TFC has secured 15,000t from Mitsubishi at $330/t cfr, significantly below the $340-360/t cfr price assessed by Argus last week. Ammonia importer BASF China has also bought 5,000-10,000t from Mitsubishi for delivery to Zhanjiang at $330/t cfr.
With freight estimated at around $30-40/t from Indonesia to east Asia, the price nets back to around $290-300/t fob Indonesia. Both cargoes will load at PAU in Luwuk Indonesia and will be delivered to Taiwan and China in mid-January.
The deals signal a notable softening of the Asian markets this week, driven by global oversupply.
TFC has also finalised its supply contracts for next year, totalling 180,000t. It has agreed to split its requirement between suppliers Saudi Arabia's Sabic and Mitsubishi. A small quantity will be bought on a spot basis during the year.
BASF China is close to concluding its annual supply contracts. It typically imports 90,000-100,000 t/yr of ammonia into Caojing. The supply contracts for 2019 are in the final stages of being negotiated with multiple parties.
