Ammonium Chloride Market Experiences an Upswing in USA and Europe Amidst Firm Demand

Throughout the second half of September 2023, the Ammonium Chloride market experienced a minor price increase in the North American and European regions. This price uptick can be linked to various factors, such as rising feedstock and upstream materials costs, strong demand for Ammonium Chloride from downstream industries, and disturbances in the supply chain.

Initially, Ammonium Chloride prices in North America saw a significant increase. This rise was primarily driven by high demand for Ammonium Chloride from both domestic and international fertilizer markets, particularly in anticipation of the upcoming winter planting season. However, as the month progressed, there was a noticeable decrease in international market inquiries, particularly from Brazil. Buyers seemed hesitant to make large purchases, which put downward pressure on import prices, signaling a sustained softening of the Western market. On the supply side, an ample quantity of Ammonium Chloride was available to meet end-users needs. These combined factors contributed to a balanced equilibrium between supply and demand in the market.

Further, data from the Bureau of Labor Statistics has shown a substantial 19.1% increase in imported natural gas prices in August 2023, and this upward trend is expected to continue. This increase in the cost of natural gas, which is a key upstream component, has, in turn, raised the production cost of Ammonium Chloride. Furthermore, the country's Consumer Price Index (CPI),  reported by the same source, revealed a 0.6% overall increase in August, with a minor 0.1% uptick specifically noted in the Natural Gas index.

Similarly, in the European region, the recent increase in Ammonium Chloride prices can be linked to a revival in demand from the downstream industry, along with a rise in the cost of feedstock Ammonia, Hydrochloric Acid, and upstream Natural Gas. During the last week of September 2023, complications arose with Norwegian offshore gas facilities, reducing the supply of Natural Gas to the Gulf Coast. Consequently, European Ammonium Chloride producers faced greater pressure to import gas from the USA instead of relying on domestic production. The weakening of the Euro against the US dollar has led to expensive imports of Natural Gas in the European region. The elevated price of feedstock Ammonia and upstream Natural Gas prompted higher production rates within the country, consequently leading to an uptick in the price of Ammonium Chloride in the USA market.

Furthermore, the demand for Ammonium Chloride from the downstream fertilizer market remained robust as consumers actively stockpiled the product in preparation for the upcoming planting season.

As per ChemAnalyst, Ammonium Chloride prices are anticipated to increase globally in the forthcoming months. The price increase can be attributed to higher feedstock Ammonia and upstream Natural gas costs. Furthermore, strong demand from the downstream fertilizer industry is expected in the upcoming months.