During December 2023, the Urea Ammonium Nitrate (UAN) market showed contrary trajectory in both European and North American market. The prices showcase a downward trajectory in the US market attributed to surplus availability of material coupled with lackluster demand from the domestic fertilizer market. However, the prices increase in the European market amidst heightened freight charges and scarcity of imported UAN in the European market.

In December 2023, a downturn unfolded in the United States UAN market. The reduction in the price of crucial upstream Natural Gas exerted downward cost pressure on domestic UAN prices. Demand for UAN remained subdued in the United States, coinciding with the conclusion of the peak fertilizer season. Further, the international market was quiet during this period, as producers focused on contracted volumes before potential spot availability in January. Moreover, the market encountered challenges related to surplus material availability, exacerbated by persistent bottlenecks in the Panama Canal, a vital global trading route originating from the USA. Furthermore, some shippers are now avoiding the Suez Canal route due to potential rebel attacks, opting for alternative trade routes. The restrictions at the Panama Canal have already prompted some shippers to reroute exports, including UAN, through the Suez Canal to reach markets in Asia. If the restrictions at the Suez Canal persist, it could become more challenging for the US to export UAN, potentially leading to a surplus and a subsequent decrease in UAN prices. As a result, there were delayed shipments to the international market, causing an accumulation of UAN inventories within the country. The combination of these factors contributed to a narrowing gap between demand and supply, thereby supporting the current decline in prices.

On the other hand, UAN prices demonstrated a positive trajectory in the European market, characterized by escalated freight charges, supply shortages, and moderate demand from the regional fertilizer market. During this period, the European market experienced a significant shortage of imported UAN due to disruptions in major trade routes. Persistent bottlenecks in the Panama Canal resulted in lengthy queues and delayed shipments of UAN. Further, the recent attack on Red Sea trade by Yemeni rebels has resulted in multiple attacks on various commercial vessels passing by. This has eventually raised concerns about the safety of maritime traffic in the region. This disturbance in Red Sea trade has exerted a substantial impact on global UAN supplies.

As projected by ChemAnalyst, there is anticipated to be a potential increase in UAN prices in the global market in the coming months. This upward trend is primarily attributed to robust demand and increased production costs.