Global energy and commodity price reporting agency Argus said today that the first-ever futures ICE Ammonia Outright – Argus Ammonia NWE CFR Future contract has traded between counterparties in a deal brokered by Freight Investor Services (FIS).
The 5,000-tonne futures contract was traded at $385/t for May delivery and cleared through ICE.
Ammonia has historically been used as a feedstock for the global fertilizer industry, but its potential as a clean fuel of the future could see its importance grow as the world experiments with more sustainable energy sources. There is interest from both power generation and marine fuels markets, both of whom see potential in low-carbon ammonia as an energy source.
The first step in this process is trading ammonia futures based on the current market, which enables an ammonia forward curve to be developed that will provide the basis for more sustainable low-carbon ammonia investment decisions. Grey ammonia futures can act as a base contract to price future blue and green ammonia trading, or as a basis to wherever that green or blue ammonia is geographically located.
CEO of FIS, John Banaszkiewicz, said: “This is an important trade for many sectors, beyond shipping and fertilizers. ICE’s ammonia contract will be a cornerstone of price discovery and risk management as ammonia is unquestionably one of the most important fuels in our energy transition to a cleaner future. We are delighted to play our small part in helping this market develop.”
Jeff Barbuto, global head of oil markets at ICE, said: “Ammonia’s potential as an alternative fuel source continues to develop as new technologies and markets evolve. We’re excited to work with our customers to further build out the market and this contract alongside ICE’s vast suite of energy derivatives and risk management tools.”
