Falling Feedstock Cost Helps Ammonium Nitrate Prices to Sustain Downtrend in the USA and Europe

According to the current assessment of price dynamics, the Ammonium Nitrate market in both Europe and North America experienced a continuous decline. This downward trend can be attributed to several factors, including weak demand from the Nitrogenous fertilizer industry, decreased raw materials Ammonia and Nitric Acid prices, a decline in procurement orders from the international markets, and a narrow demand-supply gap.

The European market has been grappling with price fluctuations for a prolonged period, primarily due to the potential threat of recession and geopolitical conflicts in the domestic region. The prices of Ammonium Nitrate in the Russian market witnessed a marginal decrease of 2.6% due to the declining price of Ammonia and Nitric Acid, which are essential feedstock materials for the production of Ammonium Nitrate. The blast in the Ammonia pipeline in Russia, which was used to transport Ammonia from Russia via Ukraine, has significantly affected the prices of Ammonia and its derivatives in Russia. Furthermore, factors such as decreased energy prices, weakened demand from domestic and international markets, and increasing inflation in the region contributed to this decline in Ammonium Nitrate prices. Consequently, trade activities remained low in Russia during this time period.

Similarly, in the USA market, the prices of Ammonium Nitrate continued to decline in May 2023, experiencing a fall of USD 21/MT. The product faced limited demand in both domestic and international markets. Additionally, the smooth supply of Ammonium Nitrate cargo and the narrow gap between demand and supply further influenced the prevailing price trend.

Furthermore, data from the US Bureau of Labor and Statistics indicated a marginal increase of 0.1% in the country's Consumer Price Index in May 2023. Additionally, as reported by FRED, the Industrial Production Index rose to 103.1 during the period.

According to ChemAnalyst, however, in the coming months, future market sentiments suggest a potential shift toward an inclining trend in the prices of Ammonium Nitrate in the European and North American regions. With the sowing season approaching, demand from the fertilizer industry is expected to remain steady. Moreover, imports to other countries are anticipated to rise, given the increased freight costs. Furthermore, the prices of feedstock materials such as Ammonia and Natural Gas may contribute to the overall price trend of Ammonium Nitrate by experiencing an upward trajectory. Additionally, the economic situation of both European and North American markets is expected to gain momentum (for agrochemicals), contributing to the increasing price trend of Ammonium Nitrate.