Global Ammonium Nitrate Market Sees Modest Price Increase in October 2023 Amidst Rising Demand

In the first half of October 2023, the global Ammonium Nitrate market experienced a modest price increase. This price uptick can be attributed to a combination of factors, including rising feedstock and upstream prices, strong demand for Ammonium Nitrate from downstream industries, and disruptions in the supply chain.

Ammonium Nitrate prices in the North American region experienced a notable increase during the first half of October 2023. This increase can be linked to several factors, including higher costs for key materials like Ammonia and Natural Gas and strong demand from the fertilizer industry. These increased costs incentivized higher production rates, subsequently exerting upward pressure on the prices of Ammonium Nitrate within the country. Further, domestic consumers of fertilizers were proactively building their stocks in preparation for the upcoming Barley planting season in October 2023, leading to a strong and consistent demand from various regions across the nation. However, it is worth noting that certain areas, including Missouri, experienced lower-than-anticipated levels of rainfall, potentially posing a threat to crop production. Furthermore, there was a robust demand for Ammonium Nitrate from importing country Brazil in the wake of Brazil’s emphasis on soybean and crop cultivation. Supply situation of Ammonium Nitrate was tight in the USA amidst global shortages.

Moreover, data from the Bureau of Labor Statistics revealed that the Producer Price Index increased by 0.5 percent in September, indicating the consumption of goods.

Similarly, the recent price surge of Ammonium Nitrate in the European region can be attributed to increased demand from the downstream industry and a rise in the price of upstream Natural Gas. In the first week of October 2023, complications arose with Norwegian offshore gas facilities, reducing the supply of Natural Gas to the Gulf. Consequently, European Ammonium Nitrate producers faced greater pressure to source gas from other countries rather than producing it domestically. With the bullish trend in European gas prices, the production of ammonia and its derivatives, including Ammonium Nitrate, in the region is expected to be limited, as producers are reluctant to increase production in line with the rising feedstock costs.

Additionally, the demand for Ammonium Nitrate from the downstream fertilizer market remained strong as consumers actively built up their inventories in anticipation of the upcoming planting season. In the same month, Russia implemented export duties on fertilizers, which include Ammonium Nitrate, further reinforcing the current price trend. However, the supply situation in the European market remained stable, with ample stocks available to fulfill end-user requirements.

According to ChemAnalyst, it is expected that Ammonium Nitrate prices will increase on a global scale in the upcoming months. This price hike can be attributed to rising costs of feedstock Ammonia and upstream Natural Gas. Furthermore, there is an anticipated strong demand from the downstream fertilizer industry in the coming months, which is expected to contribute to the price increase.