Ammonium Nitrate Spikes in the US and Asia, Dips in Europe

Ammonium Nitrate prices in the North American, Asian, and European regions exhibited mixed sentiments during the first half of November 2023. The North American and Asian markets remained bullish, driven by supply chain constraints. In contrast, the European market adopted a bearish stance due to decreased demand from end-user fertilizer markets, with the region facing potential threats to winter crops amid unfavorable climatic conditions.

The Ammonium Nitrate market in the North American region continued to follow a bullish trend. The increasing costs can be attributed to the upward movement in the prices of essential feedstock components, namely Ammonia and Nitric Acid. The prices of Ammonium Nitrate experienced upward pressure due to these escalating feedstock costs. Additionally, the regional market faced a shortage of key feedstock materials, particularly Natural Gas, as the country is currently dealing with a shortage in the Natural Gas pipeline. Further, an increase in the November contract price influenced the Ammonium Nitrate market. Insights from various market participants highlighted shortages in labor and materials within the country, contributing to a scarcity of Ammonium Nitrate in the US market. Furthermore, the demand for Ammonium Nitrate from the Brazilian fertilizer market remained robust, driven partly by Brazil's emphasis on corn and soybean cultivation. These factors created a noticeable imbalance between supply and demand, further supporting the ongoing upward price trend.

Similarly, the Ammonium Nitrate market experienced an upward trend in Asia. The primary factors contributing to this current price surge included strong demand from the Indian market during the Rabi crop planting season. Additionally, the costly imports of essential upstream Natural Gas have imposed upward cost pressure on Ammonium Nitrate prices in the Asian region. Restrictions on shipping via the Panama Canal, caused by drought conditions, have increased the cost of transporting US LNG to Asia, widening the gap between Asian and European LNG prices.

On the contrary, the European Ammonium Nitrate market has been on a downward trajectory. Storm Ciaran and heavy rainfall conditions in the north-western countries of the EU have significantly affected the planting of winter crops, thereby diminishing the expected demand for Ammonium Nitrate for spring application. Domestic demand for Ammonium Nitrate in Eastern Europe is currently absorbing a substantial portion of Russian production, mitigating the impact of limited interest from Brazil in Ammonium Nitrate. Furthermore, the demand for Ammonium Nitrate is notably weak, influenced by adverse weather conditions and unattractive crop economics, restraining interest in the market.

As per ChemAnalyst, it is anticipated that Ammonium Nitrate prices may continue to surge in the forthcoming months in the global market amidst a shortage of supplies and elevated feedstock prices.