In the first half of December 2024, the price of ammonia in the global market experienced only minor fluctuations, maintaining a largely stable trajectory. This stability suggests a relatively balanced market with consistent demand and supply dynamics. However, during the same period, natural gas prices, an essential feedstock for ammonia production saw significant increases, particularly in Western markets. Despite this upward pressure on production costs, the impact on ammonia prices was somewhat constrained. Several factors may have contributed to this limited influence, including minimal demand from the downstream market. 

In the North American market, the price of imported ammonia saw a minor surge during the first week of January 2024 but later stabilized. This temporary increase can be attributed to a shortfall in supply from Trinidad, a major ammonia exporter, due to ongoing natural gas supply curtailments. Market data reveals that ammonia exports from Trinidad in November 2024 dropped significantly, falling by over 20% compared to October. Meanwhile, the price of domestically produced ammonia remained stagnant throughout the first half of December 2024. This price stability was influenced by adverse weather conditions that curtailed demand, thereby limiting immediate consumption. Furthermore, the U.S. Department of Agriculture (USDA) recently announced investments in domestic fertilizer production across nine states. These initiatives are aimed at fostering increased competition, reducing fertilizer costs for American farmers, and ultimately lowering food costs for U.S. consumers. While these measures are expected to improve long-term market conditions, their short-term impact on ammonia prices remains to be seen, as the market continues to adapt to the interplay of supply, demand, and production cost factors.

In the European market, ammonia prices have remained stable, primarily due to steady demand and a lack of significant new bids or inquiries. However, the region is still grappling with the impact of high natural gas prices, a crucial feedstock for ammonia production, which has led to reduced production rates among fertilizer manufacturers. Consequently, many buyers are prioritizing contractual obligations over engaging in spot market transactions. On the supply side, a slight ammonia shortage has been observed, partly due to production cuts. The LAT Nitrogen reducing output at its Linz facility until the end of 2024, and YARA’s Ferrera plant undergoing scheduled maintenance. Despite these production adjustments, prices have remained stable,  as trading activity has been limited both domestically and internationally.

As per ChemAnalyst, ammonia prices are expected to rise in the global market. As procurement activities increase amidst the forthcoming winter planting season, industry analysts predict that ammonia prices will remain volatile throughout the first quarter of 2025.