VINACHEM

Northwest Europe ammonia-to-hydrogen price saw a minor increase at the beginning of the new year with baseload hydrogen generation boosted by an increase in wholesale electricity pricing.

The ammonia-to-hydrogen price rose by €0.06/kg from 21 December to come in at €5.39/kg on 4 January, snapping the recent downward trend amid ammonia prices stabilizing as 2024 begins.

The ammonia-to-hydrogen price reflects the cost of importing fossil-based ammonia to northwest Europe and then decomposing that ammonia into hydrogen. The ammonia price referenced is the ICIS CFR Northwest Europe Duty Unpaid assessment, published every working Thursday.

Baseload electrolysis using Dutch front-month power prices saw a solid rise in value to hit a four-week high of €6.41/kg on 4 January, up from the €6.07/kg from 28 December.

Low carbon hydrogen produced via steam methane reforming (SMR) with carbon capture and storage (CCS) attached using month-ahead Dutch gas saw a mild value increase on the week in early January with European gas hubs seeing a similar trend, coming in at €3.14/kg.

AMMONIA MARKET

Demand for ammonia remains weak as 2024 begins in the majority of regions, with the only demand being seen from China after a cargo from Indonesia was agreed in the week.

Contracted cargoes are seeing the market long due to the lack of demand, with European ammonia producers not having ramped up production despite the falls in European gas prices at the end of 2023.

The situation in the Red Sea remains a source of concern, with some cargoes having already been diverted around the Cape of Good Hope.

GAS MARKET

The ICIS Dutch TTF February ’24 contract has seen the end of the recent bearish market conditions that saw the market drop significantly in value during the latter part of 2023.

The front-month dropped close to the €30/MWh mark during the first trading session of 2024, however, some short-covering was seen as temperature forecasts for the near-term were revised lower.

Demand is set to see an increase from both LDZ and power stations with colder, calmer conditions set to move over the vast majority of Europe for week 2, with storage withdrawals likely to pick up in pace to cover the demand hike.