India’s IPL scraps 521,000t ammonia tender after suppliers bid less than half the volume sought

India Potash Limited scrapped its consortium ammonia tender for June–August delivery after suppliers offered less than half the volume sought, exposing the full extent of the global ammonia supply squeeze triggered by the closure of the Strait of Hormuz.

IPL’s tender sought 521,000 tonnes of ammonia for delivery to fertilizer plants on India’s east and west coasts. Global suppliers responded with bids totaling only 239,000 tonnes, according to CRU Group — 138,000 tonnes for the east coast against a requirement of 370,000 tonnes, and 101,000 tonnes for the west coast against a requirement of 151,000 tonnes. The lowest fixed-price offer came in at $890 per tonne CFR India; the highest was quoted at $1,030 per tonne CFR, according to CRU data cited by Business Today.

CRU attributed the shortfall to constrained spot availability and diverging views among sellers on near-term ammonia price direction. Suppliers are reluctant to commit at current price levels given market uncertainty, while Indian buyers are equally reluctant to accept prices above $1,000 per tonne CFR — a threshold that would generate significant losses for domestic fertilizer producers relying on government subsidy structures calibrated to pre-crisis prices.

The failure is the second major tender setback for India’s ammonia procurement program in a month. March imports plunged 61% month on month as the Strait of Hormuz closure severed the primary supply route. India’s stock cover for ammonia at coastal fertilizer plants was reported at approximately 30 days as of mid-May, well below the buffer considered adequate ahead of the kharif planting season.

IPL is expected to reissue the tender or explore bilateral procurement options. The episode has heightened interest in domestic green ammonia production as a long-term alternative to reliance on imports.

Source: Business Today