LONDON (ICIS)–Ammonia markets saw continued uptick over week 38 as European market participants refrained from ramping up production, leaving the market tight on account of high gas prices. As such, the ICIS ammonia-to-hydrogen assessment for northwest Europe pushed above the €5/kg mark, a level last recorded in March 2023.
Ammonia producers have been waiting for more stability at Europe’s gas hubs before returning to operations. However, a higher reliance on LNG imports to meet demand in the absence of Russian pipeline gas has contributed to highly volatile gas markets.
Over week 38, continued issues with Norwegian offshore gas assets returning from maintenance, paired with a drop in flows to US Gulf Coast Sabine Pass LNG lifted gas prices, further pressuring ammonia producers into purchasing import cargoes rather than producing in Europe.
Bullish activity on EU gas markets also lifted domestic hydrogen production costs, however, with low-carbon ATR-based hydrogen using front-month Dutch gas climbing €0.16/kg week on week in week 38. The production method was assessed at €3.18/kg on Thursday, including capital cost recovery.
Published by: www.icis.com
Jake Stones
22-Sep-2023
