Throughout September 2024, the global Ammonia market experienced persistent price fluctuations, ultimately registering an overall upward trend on a month-on-month basis. The primary driver behind this price surge was the rising cost of Natural Gas, a critical feedstock for Ammonia production, spurred by a shortage in the global supply of this material. Additionally, adverse weather conditions in key manufacturing regions further constrained production activities, intensifying supply-side pressures in the market. Despite these supply challenges, demand for Ammonia remained relatively subdued. The usually robust seasonal demand for Ammonia, especially in agricultural and industrial applications, has weakened, leading to a more subdued global demand landscape.

In North America, Ammonia prices surged during September 2024, driven by several key factors. The most significant was the limited availability of Natural Gas, a crucial raw material for Ammonia production, which added substantial upward pressure on prices. This supply constraint was exacerbated by delays in exports from Trinidad, one of the world’s major Ammonia producers. Nutrien, a leading producer, further tightened global supplies by announcing the indefinite closure of one of its four Ammonia plants in Trinidad, compounding the already strained market conditions. Despite these notable supply-side challenges, demand for Ammonia remained largely stagnant. Buyers were hesitant to make large volume purchases due to the ongoing impact of tropical storms and heavy rainfall across the region, which created significant uncertainty in agricultural activities. This uncertainty particularly affected the fertilizer sector, where Ammonia is a key input. As a result, while supply disruptions drove prices upward, demand failed to show any substantial increase, as consumers maintained a cautious stance in response to the volatile weather patterns.

In like manner, in the European market, Ammonia prices surged, reversing the trend seen in the previous month. Several factors contributed to this price escalation, chief among them being the rising cost of Natural Gas, a critical feedstock in Ammonia production. Additionally, reduced production activities within the region and the limited availability of raw materials further fueled the price increase. The significant shortage of this essential raw material has directly affected Ammonia production, resulting in reduced output levels and further driving the increase in Ammonia prices. Despite the ongoing supply challenges, demand for Ammonia remained moderately low.  Planting season saw mixed outcomes, with poor yields reported in Belgium, France, and Italy, contrasted by exceptional yields in Bulgaria, Romania, and Spain. The UK also experienced below-average yields as its harvest season concluded. Meanwhile, Türkiye benefited from favourable conditions during its harvest period. In Ukraine, the harvest has concluded with mixed outcomes. While yields in the western regions were favorable, the eastern and southern regions experienced poor results due to the impact of dry weather and ongoing conflict, which continue to hinder agricultural productivity.

As per ChemAnalyst, Ammonia prices are expected to rise in the coming months. The onset of the winter planting season is likely to trigger a renewed demand for Ammonia, which could further drive-up prices.