Global Ammonium Sulphate Prices Decline by mid-May 2024 Amidst High Supplies

During the first half of May 2024, the global Ammonium Sulphate market has sustained a bearish trend. The primary reason for this decline is the reduction in costs of essential raw materials, Ammonia and sulphuric Acid. This decline in Ammonia and Sulphuric Acid prices have significantly eased production costs, exerting downward pressure on market prices. Furthermore, the decrease in demand from significant downstream fertilizer markets, along with diminished planting activities, has also played an important role in the overall decline in prices.

In the first half of May 2024, the North American Ammonium Sulphate market underwent a notable downturn. The resumption of operations by BASF, a prominent Ammonium Sulphate producer in the region, following a maintenance shutdown, notably enhanced the supply of Ammonium Sulphate. Moreover, decreased netbacks on contractual shipments to North African and Asian markets in recent weeks intensified the downward pressure on prices in the region.

Furthermore, during the end of March 2024, the United States Department of Agriculture announced an investment ranging between USD 120 -124 million in fertilizer production projects crossing across 44 states. This initiative aims to mitigate input costs for agricultural producers and is expected to generate approximately 3,800 tonnes of dry fertilizer per year across three facilities in Iowa and Nebraska. With a combined production capacity of 11,400 tonnes, these initiatives are forecasted to benefit approximately 1,500 producers, advocating for sustainable agricultural practices and fortifying economic resilience within the fertilizer sector. As a result, this investment could potentially impact Ammonium Sulphate prices, reflecting the evolving dynamics within the industry.

Likewise, the Chinese Ammonium Sulphate market experienced a downward pricing trend in the first half of May 2024. The influence of the most crucial feedstock, Ammonia, on Ammonium Sulphate prices has been somewhat mitigated by cost pressures. Significantly, there has been a notable lack of new orders or bids from both domestic and international markets, attributed to the Chinese government's ongoing suspension of exports until the peak planting season of 2024.

Simultaneously, demand for Ammonium Sulphate remained restricted within the Chinese market, with inland demand remaining strong. Producers anticipated to maintain purchases for the production of high-sulphur-based fertilizers for summer corn application; however, demand fell below expectations. Moreover, data from the National Bureau of Statistics (China) indicates a decrease in new export orders from 51.3 to 50.6, aligning with the prevailing market dynamics. Indicating a challenging market situation for the domestic market of China.