In the first week of February 2024, the global Ammonium Nitrate market persisted in displaying bearish market sentiments, mirroring the trend observed in January 2024. The ongoing decrease in the price of vital feedstock materials, namely Ammonia and Nitric Acid, has led to reduced production costs, thereby exerting downward pressure on Ammonium Nitrate prices. Further, diminished demand for the material from prominent end-user fertilizer markets, along with trade uncertainties and unfavourable weather conditions within the country, are significant factors contributing to the downturn in Ammonium Nitrate prices.

During the initial period of February 2024, the Ammonium Nitrate market in the United States exhibited pessimistic sentiments, primarily attributable to an oversupply of material domestically and subdued demand both domestically and internationally. Demand for Ammonium Nitrate and its essential downstream product, Urea Ammonium Nitrate (UAN), remained constrained in the domestic fertilizer market following the conclusion of the peak planting season. Moreover, demand from Brazil, a major importing nation, was limited during this time due to the Carnival celebrations, which traditionally lead to a temporary slowdown in agricultural activities. This effect is commonly observed during the Carnival season, as agricultural workers participate in festivities, resulting in reduced demand for fertilizers. This situation was further exacerbated by significant stockpiles of Ammonium Nitrate within the country. Prolonged drought conditions at the Panama Canal, a critical global trade route originating in the USA, have contributed to the prevailing conditions. Additionally, some major shipping companies have opted for alternative trade routes over the Suez Canal due to concerns about potential rebel attacks. Constraints at the Panama Canal have prompted certain shippers to redirect exports, including Ammonium Nitrate, through the Suez Canal to access Asian markets. If limitations at the Suez Canal persist, the export of Ammonium Nitrate from the US may encounter increasing challenges, potentially leading to an oversupply in the domestic market and subsequent price reductions. The accumulation of Ammonium Nitrate inventories within the country has been exacerbated by delays in shipments to the international market. The combination of these factors has resulted in a diminished disparity between demand and supply, thereby bolstering the ongoing decline in prices.

In similar manner, European Ammonium Nitrate market prevailed bearish sentiments during Feb 2024. Declining price of material in exporting country Germany led to cheaper imports from overseas thus exerting downward cost pressure on Ammonium Nitrate prices. Demand for Ammonium Nitrate in European market from prominent end-user fertilizer sector remained somewhat restricted amidst freezing temperature and snowstorm. Despite an overall improvement in manufacturing activities in the Eurozone, the Euro Area's business activity remained below the threshold limit. Encouragingly, there were positive indicators, including the slowest rate of decline since August 2023, a minimal decrease in new business inflows over seven months, and the smallest reduction in new business from external clients since April 2023.

As per ChemAnalyst, the prices of Ammonium Nitrate are expected to decline further in the coming days amidst declining price of essential feedstock material and subdued demand.