Ammonium Nitrate Prices Continue to Slump Downwards Amidst Lackluster Downstream Demand

In June 2023, the Ammonium Nitrate market experienced a continuous downward trajectory in North American and European markets due to lower feedstock Ammonia prices. The continuous declining price trend of Ammonia and Natural gas has severely impacted the production and prices of Ammonia derivatives, including Ammonium Nitrate, Ammonium Sulphate, and Urea globally. Additionally, diminished demand from the end-user fertilizer market since the peak agricultural demand season has passed has supported the prevailing price trend. Furthermore, the slow economy, growing inflation, and energy crisis have caused the prices of Ammonium Nitrate to plunge in the European and American markets.

In the USA market, the prices of Ammonium Nitrate experienced their lowest point on the back of gloomy demand from the end-user fertilizer market. Further, declining prices of feedstock Natural Gas, Ammonia, and Nitric Acid also impacted the prices of Ammonium Nitrate. Declining market trading activities kept the spot market from becoming active. Additionally, the imports of Ammonium Nitrate to other North American countries, including Canada and Mexico, declined, as countries exhibit little interest in bulk purchases since the seasonal demand has passed.

As indicated by FRED, the Producers Price Index of Chemicals and allied products has decreased from 327.8 in April 2023 to 321.6 in May 2023 and is expected to decline further.

Similarly, the prices in the European region have been grappling for a long time. Economic uncertainties and growing inflation due to the ongoing war in the region have further impacted the prices. Further, a shutdown of the Ammonia pipeline in Russia has impacted exports and severely affected the prices of Ammonia and its derivatives in the region. This shutdown has led to surplus material availability in the market and forced traders to lower the prices. The European Central Bank has raised the interest rates high in the region to control inflation further. Furthermore, weakened demand from domestic and international fertilizer markets has contributed to the decline of Ammonium Nitrate prices.

In summary, the Ammonium Nitrate market has remained bearish throughout June in North American and European regions due to various factors.

However, as per the price analysis by ChemAnalyst, a potential shift in the prices of Ammonium Nitrate is expected in Russia and USA in the forthcoming months on the back of inclining prices of feedstock Ammonia and an expected rebound in economic conditions. Further, fluctuating Natural Gas and Crude Oil prices may impact the production rate and consequently affect the price trend.