Throughout January 2024, the Ammonia market experienced a continual decline in both Western and Asian regions, in stark contrast to the movement of the vital downstream derivative, Urea, which exhibited a divergent trend during the same period. In the Western market, the decrease in Ammonia prices is attributed to several factors, including the diminishing costs of crucial feedstock, Natural Gas, along with accumulated inventories and subdued demand exacerbated by adverse weather conditions. Concurrently, the Asian market witnessed a reduction in Ammonia exports and diminished demand, contributing to the overall price decline.

In North America, Ammonia prices witnessed a significant 16% decrease, primarily influenced by the easing costs of Natural Gas, a pivotal feedstock. This reduction led to decreased production rates, exerting downward pressure on Ammonia prices. The North American region faced additional challenges due to diverse weather and soil conditions between the eastern and western Corn Belt, impacting end-users. Furthermore, delays in widespread post-harvest fieldwork in Nebraska and Missouri were experienced due to dry soil conditions and higher-than-usual temperatures. Unfavourable weather conditions in the western Corn Belt further dampened fertilizer demand, encompassing Ammonia, Ammonium Nitrate, and Diammonium Phosphate, resulting in elevated inventories at terminals. By the end of the month, relief from dry weather conditions was observed, but consumers remained hesitant to make bulk purchases. As a result, producers and suppliers must release more competitive pricing for the forthcoming planting season of Barley, Corn, and wheat within the country. Failure to do so may result in another season of cautious purchasing, leaving terminals with elevated inventories as activities taper off in the spring.

Concurrently, pessimistic sentiments characterized the Asian Ammonia market, market by the notable absence of key market participants. China, a key market player remains absent from the export market showing no indications of re-entry until the conclusion of the season. Meanwhile increased domestic production, coupled with subdued domestic demand and a complete absence of exports has led to the accumulation of inventories. Simultaneously, the Indonesian government’s decision to withhold port clearance for products already possessing export licenses has hindered exports, resulting in a buildup of inventories at the port and subsequently contributing to a decline in domestic Ammonia prices.

As predicted by ChemAnalyst, a continued decrease is anticipated in the global Ammonia market. This decline is primarily ascribed to a reduction in demand from prominent end-user sectors, particularly the fertilizer industry, coupled with the accumulation of inventories amid ongoing trade uncertainties.