Global Ammonium Nitrate Market Shows Divergent Trends Amid Fluctuating Demand

In the first half of July 2024, the world market of Ammonium Nitrate had a different pattern. While prices rose slightly in North America, they fell in the Chinese market. The main reason for the price increase in the North American market is the forced shutdown of some Ammonium Nitrate transport equipment and material shortages in the region, which caused reduced production activity due to Hurricane Beryl. On the other hand, China's Ammonium Nitrate market collapsed during this period as demand in the downstream industry declined.

During the period under review, the Ammonium Nitrate market in North America recovered significantly. The widening gap between supply and demand is the main reason for this price increase. Massive flooding and transportation infrastructure disruptions from tropical storms have severely disrupted supply chains and operations. Power outages caused by Hurricane Beryl continued to hamper production throughout the region. In addition to these difficulties, the two largest production facilities of ammonia raw material of Texas, YARA/BASF and OCI, with a monthly production capacity of approximately 42,452 tons and 18,742 tons, respectively, reported force majeure earlier in the week. The shortage of raw materials led to reduced operations, which weakened the Ammonium Nitrate supply situation in the North American market. At the same time, there has been moderate demand for Ammonium Nitrate on both the domestic and international markets in recent weeks. The strong demand for Ammonium Nitrate was blamed on favourable weather conditions, particularly in the western Corn Belt, where heavy rains and thunderstorms created ideal conditions for corn planting.

However, there were signs of decline in the Chinese Ammonium Nitrate market. By the end of the week, domestic requests for Ammonium Nitrate were significantly lean, indicating a period of relatively low demand. This muted domestic interest in Ammonium Nitrate was exacerbated by a restrictive international market, where demand remained weak. International demand was limited by major delivery delays, mainly due to constant port congestion. The slight increase in domestic demand was largely due to fruit producers ceasing the processing of summer fruit, which temporarily increased their fertilizer needs. Despite the increase in demand from the local agricultural sector, there has been no corresponding growth in the global fertilizer market. Continued congestion at major ports continued to disrupt the supply chain, preventing the timely delivery of Ammonium Nitrate and contributing to the overall decline of the market. This scenario reflects a broader trend of limited international demand, with logistical problems exacerbating the supply-demand mismatch. In addition, statistics collected from various market sources show that China's production of nitrogen-based fertilizers, including Ammonium Nitrate, is still unstable, averaging capacity of177,000-178,000 tons per year.

According to ChemAnalyst, the Ammonium Nitrate market is expected to decline in the coming months. This forecast is mainly due to lower commodity prices and seasonal demand.