Prolonged Price Escalation for Ammonia Is Over For Saudi Arabia, Prices Are Showing Marginal Ease In The Country

Ammonia prices are falling in Saudi Arabia and other parts of the world, reducing fertiliser cost pressures, and providing relief to farmers preparing for spring planting. Aside from continued applications in the Middle East, Ammonia pricing remained mostly on a downward trajectory in the late January. In January, there was not enough domestic fertiliser activity to report, as barge trade and terminal buying remained quiet. As per the ChemAnalyst database, On the 28th of January, FOB Jebel Ali Ammonia prices were reported at USD970/MT, a decrease of 2% week-over-week in Saudi Arabia.

The fact that European natural gas prices were half of what they were at the most recent market high early last month is helping to bring the prices to a certain low level. In January, the price gap between relatively cheap prices in the Middle East and higher prices elsewhere in the world remained large enough to make exports commercially viable. The decline in price trends was caused by aggressive stockpiling activity in the initial days of January, when purchasers took advantage of low quoted prices by traders and purchased large quantities of Ammonia to meet customer demand.

As per ChemAnalyst, “In the immediate term, we predict Saudi Arabian Ammonia prices to stay steady, with the possibility of firming in Q1. Saudi mines are also aiming to increase production in the first quarter of 2022, which might alleviate some of the international market's pressure. The looming concern about Fertilizer supply consistency in the coming days, owing to delays caused by a surge in Covid cases in the country, as well as high feedstock prices in the worldwide market, prompted buyers to hold reserve stockpiles to avoid harming customer sentiments.”