Ammonium Nitrate Prices Edging Upwards Amidst Robust Demand from Downstream

The price of Ammonium Nitrate has risen dramatically this month due to a sharp increase in the raw materials Ammonia and Nitric Acid costs and significant demand from the downstream fertilizer and mining sector. The current stockpile of fertilizers in India is insufficient to meet the market's estimated seasonal demand. Despite continued strong demand from the fertilizer and mining industries, the supply remained inadequate to cover the country's total demand. Furthermore, the increasing shortage of raw material Ammonia and inflationary pressure, and logistical issues remained the significant reasons for this price hike in the global market. The recent Ammonium Nitrate prices in the Indian Market were assessed in the range of USD964-972/MT Ex-Mumbai, following a significant price hike.

For months, miners worldwide have been warning about the growing costs of energy, labor, and chemicals, with Freeport-McMoRan Inc., the world's largest copper and gold miner and one of the first to mention higher Ammonium Nitrate prices. Concerns over the chemical compound's availability, also used as a fertilizer, grew in February after Russia, a significant supplier, restricted its exports. Additionally, Coal India expects to generate roughly 700,000 tonnes of Ammonium Nitrate per year to safeguard profit margins, around half of what it consumes.

Even though the market for fertilizer-grade Ammonium Nitrate in the United States represents a small portion of overall domestic nitrogen use, it is still in a state of instability. Following an energy shortage that slowed production in Europe, fertilizer prices have soared to new highs worldwide, while export restrictions and trade sanctions limit the fertilizer supply.

Fertilizer, on the other hand, has a promising future. Customers from both domestic and foreign markets are putting a lot of pressure on the industry. According to Deepak Fertilisers, an innovative Ammonium Nitrate complex is being created to accommodate this expanding need. When completed, the project will help Odisha become a significant supplier of technical Ammonium Nitrate to the entire Eastern region, which is expected to account for the majority of future mining expansion.

According to ChemAnalyst, "Ammonium Nitrate prices are predicted to remain robust in the coming months, based on current demand-supply dynamics, as domestic demand is expected to rise. In addition, rising raw material costs may cause firms to pass on higher manufacturing costs to customers."