Global Ammonium Sulphate Market Follows Bullish Trend Amidst Curtailed Feedstock Supplies

The global Ammonium Sulphate market witnessed a rising trend throughout January 2024. This upward surge in prices can be attributed to a confluence of factors, including increased shipping charges due to persistent trade uncertainties in the global market, a shortage of crucial feedstock Ammonia, and a resurgence in demand from prominent downstream fertilizer markets.

In the North America, there was a notable 3.5% month-on-month increase in the price of Ammonium Sulphate. At the beginning of the month, a modest upswing in the demand for Ammonium Sulphate was observed in both the North American and South American fertilizer markets, attributed to improved weather conditions in some places and the alleviation of drought conditions in the respective countries. Throughout this period, a consistent demand for fertilizers, including Ammonium Sulphate, persisted in the South American market due to the ongoing planting season for crops such as Corn, Cotton, and Sorghum. The relief from prolonged drought conditions in Rio de Janeiro, brought about by torrential rain, marked a positive development in the region. However, as the month progressed, a reduction in production activities became apparent due to freezing temperatures and snowstorms. Severe winter conditions led to the closure of the U.S. Nitrogen LLC plant in Tennessee and the Yara/BASF JV plant in Texas, raising concerns about broader supply chain impacts. Additionally, a disruption in the Ammonia gas pipeline at the Bethpage ice rink, resulting from a compressor malfunction, caused a shortage of Ammonia in the region. This shortage of a critical raw material exerted upward cost pressures on downstream derivatives, notably affecting Ammonium Sulphate prices. Furthermore, ongoing trade uncertainties persisted amid continuous rebel attacks in the Red Sea. Maersk's decision to reroute vessels away from Red Sea routes, opting for navigation around Africa's Cape of Good Hope due to rebel attacks, significantly increased tonne-miles. These strategic changes posed a multifaceted challenge for global trade, leading to increased transportation costs.

Similarly, in the Asian market, prices witnessed a continuous surge throughout January 2024. The primary factor driving this upward price trend was a scarcity of Ammonium Sulphate in the Chinese market. Information gathered from various market sources revealed a decline in Ammonium Sulphate emissions from major factories in the Shandong region, alongside equipment maintenance issues, bolstering the supply side. Additionally, the uncertainty surrounding the pre-Chinese New Year cargo rush contributed to the price surge. Moreover, the Red Sea remains a significant source of concern for shippers and exporters in Asia, as freight rates continue to escalate due to a tightening availability of container vessels. With diversions away from the Red Sea occurring just two and a half weeks before the Lunar New Year, carriers are actively adjusting sailing speeds and adding extra vessels to accommodate the longer routes, leading to disruptions in ocean freight and increased costs. On the demand side, domestic demand for Ammonium Sulphate from the fertilizer market in China remained moderate, as consumers started stocking up for the upcoming barley and wheat planting season.

The intricate interplay of these factors reinforced an overall bullish trend in the Global Ammonium Sulphate market.

As anticipated by ChemAnalyst, the Ammonium Sulphate market is expected to observe a significant surge in global Ammonium Sulphate prices in the forthcoming months amidst shortage of essential feedstock.