Global Ammonium Nitrate Prices Soar Amid High Demand and Supply Chain Disruptions
- 05-Sep-2023 2:10 PM
- Journalist: Timothy Greene
In August 2023, the Ammonium Nitrate market witnessed a notable increase in prices in both the North American and European markets. This price surge can be attributed to several factors, including disruptions in the supply chain, a resurgence in demand from the international market, and rising freight charges. Additionally, there was an increase in the price of feedstock Ammonia in Europe, further contributing to the price escalation. However, it is worth noting that the North American Anhydrous Ammonia market remained relatively stable during this same period.
In Europe, the prices of many fertilizers, including Ammonium Nitrate and its feedstock Ammonia, experienced a significant increase. This surge in prices can primarily be attributed to the improved performance of the international market. At the start of August 2023, Russian producers actively entered the USA market for Nitrogenous fertilizers, motivated by higher local prices and the need to secure fertilizers for the upcoming planting season in September 2023 and October 2023. Nevertheless, by the end of the month, Russian producers became actively engaged in the U.K. and France markets, expanding their sales activities for the upcoming months.
Further, certain disruptive events had an impact on the fertilizer landscape. A fire in a fertilizer warehouse in Moscow and the subsequent damage to 60,000 tons of fertilizer at the Odesa port at the end of July disrupted the supply chain for fertilizers, including Ammonium Nitrate, within the European market. These events contributed to the price surges seen in the fertilizer market in Europe.
Conversely, in the United States, the price of Ammonium Nitrate followed an upward trend, driven by costly imports from overseas markets and shifts in demand within the domestic market. Notably, Minnesota faced severe drought during this period, resulting in a noticeable shortage of procurement orders for Ammonium Nitrate. In contrast, the demand for fertilizers, including Ammonium Nitrate, in the southern region, particularly in South Dakota, experienced a moderate increase due to rainfall. This climatic event contributed to a modest rise in Ammonium Nitrate demand.
Furthermore, the low water levels in the Panama Canal, caused by high temperatures, led to delayed imports, subsequently resulting in a scarcity of many fertilizers, including Ammonium Nitrate, in the regional market.
As per ChemAnalyst, Ammonium Nitrate prices are expected to witness an uptick in the forthcoming months in both the North American and European regions on the back of reviving demand from the end-user market and a notable upswing in feedstock Anhydrous Ammonia and upstream natural Gas prices.