Texas- The Nitrogen prices in mid-2023 continued to windle on the back of a slower demand outlook from end-use manufacturing units. Farmers have reduced the amount of fertilizer applied to fields due to concerns with availability and affordability, contributing to the price reduction. The downstream sector is also impacted by supply-side problems, such as a shortage of supplies and trade restrictions in China. Nitrogen plays a crucial role during the manufacturing process of fertilizer, and the demand outlook depends upon the market fluctuations of fertilizers in the US market. Nitrogen price variations are witnessed between USD 590-640 per MT, FOB Illinois.

In the initial phase of the first quarter of 2023, the prices dropped due to declined natural gas prices accompanied by slower demand from end consumers. Production costs in the country of Nitrogen proportionally fluctuated with its upstream (natural gas) prices in the domestic market. Furthermore, the inventories were also less in the market, and the need to restock the same became a necessity. However, the variations in demand for Nitrogen from Nitrogen-based fertilizer-producing countries remained on the weak side, impacting the purchasing interests.

The supply shortage used to be one of the major facets governing the prices of Nitrogen in the last quarter of 2022; however, the factors changed in the first quarter of 2023, and the decline in buying patterns governed the final prices of Nitrogen in the US market. With the commencement of warmer temperatures, the demand and the prices of natural gas perceived a drop easing the production cost. Besides, the demand for Nitrogen from the overseas market has declined amidst the declining freight charges between the US and Asian countries.

With the commencement of the spring season, the expectations of demand for Nitrogen and Nitrogen-based fertilizers inclined as the sowing time reaches its peak. However, the overall market trend towards the quarter end is anticipated to remain foggy owing to slow demand and continuous decline in prices of natural gas in the US market. As per ChemAnalyst, the market prices of Nitrogen are expected to regain strength towards the last quarter of 2023.