VINACHEM

Northwest Europe ammonia-to-hydrogen assessment fell in value for the third straight week with ammonia pricing continuing to slide amid a balanced supply and demand picture.

The ammonia-to-hydrogen northwest Europe assessment fell by €0.11/kg week on week to €6.72/kg on 23 February, setting yet another 15-month low in the process.

Natural gas-based hydrogen production methods also posted slight losses amid a drop in wholesale gas pricing in Europe, narrowing the ammonia-to-hydrogen premium as a result.

Both front-month based unabated SMR and low carbon ATR hydrogen production held discounts of €2.57-2.91/kg below imported ammonia-for-hydrogen.

AMMONIA MARKET

Ammonia pricing across Europe continued to come under pressure in the early part of the second half of February with weak demand continuing on the global market.

Supply is said to be outstripping demand, as production has ramped up on the back of the steep fall in European gas hubs since the beginning of the year.

Talk has been heard among market participants regarding potential curtailments in Europe, however Asian ammonia producers are running at normal rates, keeping supply elevated.

GAS MARKET

The ICIS TTF March ’23 contract tracked sideways during the week, hovering around the €50/MWh mark with little firm price direction being offered at a key support level.

LNG flows into Europe have continued at robust levels with Germany beginning to see regasification levels on the rise, and with demand continuing to be weaker on an annual basis, storage stocks are still pointing to a large overhang ahead of injection season.

ICIS data showed European gas demand averaged of 15.9TWh/day (1.5 billion cubic metres/day) for the 1 January-23 February period this year in comparison to the 18.5TWh/day average for the same period in 2022.

The data also showed that European gas stocks stood at 173.4TWh at the beginning of the 24 February gas day, close to 100TWh higher than 12 months prior.  – ICIS Blog –