During the first half of January 2025, the global Ammonia market prevailed divergent trends, with Asia and Middle east being the most impacted region. The prices declined in the Asian market throughout the review period. However, remained stable during first seven days and surged later in the Middle Eastern market owing to fluctuating feedstock cost, demand and geopolitical tensions.

In the current review period, the price of Middle Eastern Ammonia showed signs of stabilization after experiencing a decline the previous week. This price stabilization occurred despite fluctuations in the cost of Natural Gas, a key feedstock for Ammonia production. However, the impact of these fluctuations on Ammonia prices remained minimal, as market conditions were relatively balanced. Spot market activity remained subdued, with much of the traded volume continuing to move through long-term, contractual agreements. This shift highlights a cautious market sentiment, where traders and buyers are opting for predictable and stable procurement strategies rather than engaging in short-term, spot market transactions. On the supply side, there were no significant disruptions or curtailments, and Ammonia availability remained robust, contributing to price stabilization. Additionally, Ma’aden, a major producer in the region, has been able to maintain regular export commitments, with plans to ship more than 150,000 tons of Ammonia in January.

As the month progressed, supply remained stagnant however, demand for Ammonia in the region remained moderate. A significant factor behind the moderate demand was the fulfillment of contractual orders for December, which limited the need for additional bulk purchases.

In contrast, the Chinese Ammonia market experienced a price decline this week, continuing the downward trend observed the previous week. The reduction in prices can be attributed to a narrowing of the supply-demand gap, with domestic production continuing at healthy rates supported by low Thermal Coal costs. As Ammonia production units resumed operations, inventory levels increased, contributing to an oversupply situation. In addition, the weak performance of downstream derivative Urea market and declining fertilizer exports in December further widened the gap between supply and demand, pressuring Ammonia prices downward. With government-imposed restrictions on fertilizer exports contributing to reduced shipments, buyers have increasingly sought more stable supply chains outside of China, further contributing to the oversupply dynamics.

As per ChemAnalyst, global Ammonia prices are projected to increase due to the expected rise in fertilizer demand for the upcoming winter planting season. The seasonal boost in agricultural activity, coupled with ongoing supply constraints, is likely to push Ammonia prices higher, with a combination of limited supply and strong demand influencing market dynamics.