Ammonium Chloride Price Falls Globally Amidst Seasonal Dullness in Fertilizer Industry

During December 2023, the Ammonium Chloride prices experienced a downward trajectory in the global market. This price dip in the global market is primarily attributed to surplus availability of material coupled with lackluster demand from the domestic fertilizer market.

In December 2023, a downturn unfolded in the United States Ammonium Chloride market. The decrease in the price of essential upstream Natural Gas imposed downward cost pressure on domestic Ammonium Chloride prices. The demand for Ammonium Chloride remained subdued in the United States, aligning with the conclusion of the peak fertilizer season. Further, the international market experienced a period of low activity as producers prioritized contracted volumes over potential spot availability in January. Furthermore, the market faced challenges associated with surplus material availability, aggravated by persistent bottlenecks in the Panama Canal, a crucial global trading route originating from the USA. Additionally, some shippers are now avoiding the Suez Canal route due to potential rebel attacks and are choosing alternative trade routes. The limitations at the Panama Canal have led several shippers, including those transporting Ammonium Chloride, to reroute their exports via the Suez Canal to reach markets in Asia. If the limitations at the Suez Canal persist, it could become more difficult for the US to export Ammonium Chloride, potentially resulting in a surplus and subsequent reduction in Ammonium Chloride prices. Consequently, delayed shipments to the international market led to an accumulation of Ammonium Chloride inventories within the country. The confluence of these factors contributed to a narrowing gap between demand and supply, thereby supporting the current decline in prices.

In like manner, Chinese Ammonium Chloride market also observed bearish sentiments throughout December 2023. Declining price of essential feedstock Ammonia and Hydrochloric Acid along with lower production cost within the country exerted downward cost pressure on Ammonium Chloride prices. Further, during this period, demand from international market remained subdued with no new bids or enquiries after Chinese government ceased issuing additional CIQ export licenses and adopted a stringent stance on exports. Reports indicate that the containers that had already been export-cleared being removed from vessels of fertilizers including Ammonium Chloride. Furthermore, insights from various market participants suggest that manufacturing units within the country were operating at a healthy rate. Additionally, demand from the domestic fertilizer market remained weak since the peak planting season within the country has passed and the consumers are waiting for Spring 2024 to procure fertilizers. The combination of these factors prompted narrow gap between demand and supply thus supporting the current price dip.

According to ChemAnalyst, there is an expected rise in Ammonium Chloride prices in the global market in the upcoming months. This upward trajectory is mainly ascribed to strong demand and heightened production costs.