For the Quarter Ending September 2024
North America
The third quarter of 2024 witnessed a notable increase in North American Ammonia prices, driven by several key factors. Supply constraints emerged as a result of production cuts at multiple ammonia plants, compounded by adverse weather conditions that disrupted logistics and transportation networks.
In August 2024, a critical shortage became evident in the North American market, primarily due to reduced production rates in Trinidad, a major exporter of Ammonia to the United States. Ongoing natural gas supply issues in Trinidad led to delayed and diminished exports, which further strained Ammonia stocks in the region. As the quarter progressed, the North American fertilizer industry adopted a cautious stance due to persistent adverse weather, including hurricanes and thunderstorms. Although Hurricane Francine impacted southern Louisiana, market reports suggest that most of the state’s fertilizer sector managed to endure the storm’s effects without significant disruption. Nevertheless, the industry remained on alert as another tropical storm was anticipated, raising concerns about further disruptions.
By the end of the quarter, the price of Anhydrous Ammonia stood at USD 490/MT CFR Tampa in the USA, underscoring the consistent upward trajectory in pricing throughout the period.
Asia
The Asian Ammonia market exhibited a mixed trend during the third quarter of 2024. Prices declined during the first two months of the quarter, with China being the most significantly affected. Persistent port congestion within the region led to inventory buildups, as vessels faced extended waiting times—up to four days at Shanghai, two days at Qingdao, and three days at Port Klang. This ship bunching, a lingering effect of earlier port disruptions, has severely impacted the supply chain, contributing to the accumulation of ammonia stocks. Combined with subdued demand due to the end of planting season activities, these factors drove prices down. However, in the final month of the quarter, prices surged due to adverse weather conditions that disrupted logistics and transportation networks. Typhoon Yagi, the strongest storm to hit Asia in 2024, struck China’s Hainan province, bringing torrential rains and winds of up to 234 km per hour. The typhoon caused widespread damage, resulting in extensive power outages and significant disruptions to daily life. These conditions further strained transportation infrastructure and power supplies, exacerbating production challenges for key industrial sectors, including Ammonia manufacturing. Additionally, preparations for winter planting began to pick up, boosting demand. By the end of the quarter, the price of Aqueous Ammonia FOB Qingdao in China rose to USD 415/MT, reflecting a renewed upward trend in the market.
Europe
During Q3, the European Ammonia market experienced a significant surge, particularly in Russia, the Netherlands, and the United Kingdom. This increase in prices was mainly attributed to a shortage of raw materials in the European market. The shortage stemmed from Ukraine’s incursion into Russia’s Kursk region, where the critical Sudzha gas transit station is located. Disruption at this key transit point created a ripple effect, impacting European gas supplies and further intensifying the regional shortage of Natural Gas. The severe scarcity of this essential raw material directly affected Ammonia production, resulting in reduced output levels and contributing to the rise in Ammonia prices. Demand for Ammonia remained moderate, driven by domestic requirements and orders from European importers. However, this demand was largely concentrated among smaller buyers within the region, reflecting a cautious market outlook. Additionally, the market faced further challenges due to fluctuating weather conditions, which impacted demand from the major downstream fertilizer sector. These unpredictable weather patterns made it difficult for farmers to forecast their fertilizer needs, creating a more volatile demand environment. By the end of the quarter, the price of Ammonia FOB Novorossiysk (Russia) was recorded at USD 495 per metric ton.
South America
In Q3 2024, the South American Ammonia market experienced a marked uptrend, with Brazil showing the most pronounced fluctuations. Several factors have contributed to this price increase, including supply constraints resulting from production issues in major exporting regions. Decreased exports, logistical challenges, and global trade uncertainties have collectively tightened the supply chain, pushing prices higher. Additionally, domestic demand remained subdued due to weather-related uncertainties, leading to cautious purchasing behavior among farmers. This has further widened the supply-demand gap, intensifying the upward pressure on prices. In Brazil, the price increase was particularly significant, showing a 4% rise compared to the previous quarter and a 21% difference when comparing the first and second halves of the quarter, indicating a rapid price escalation within a short timeframe. By the end of the quarter, the price of Anhydrous Ammonia CFR Sao Paulo reached USD 470/MT, highlighting the overall upward trend and positive sentiment in the regional pricing environment.
Middle East
In Q3 2024, the Ammonia market in the MEA region saw a notable uptrend in prices, influenced by several key factors. The absence of major exporters from the global market reshaped demand dynamics, particularly affecting Saudi Arabia. Increased international interest and consistent demand ahead of the planting season helped to support higher prices. Supply constraints also emerged due to production challenges at Ma’aden, one of the country’s key ammonia-producing facilities, leading to shortages that further elevated prices. Additionally, rising production costs, driven by higher feedstock prices and escalating freight charges, contributed to the overall price surge. Saudi Arabia experienced the most significant price fluctuations, recording a 23% increase compared to the previous quarter. Although prices were down by 11% compared to the same quarter last year, there was a 6% rise from the first to the second half of the quarter, highlighting a sharp incline. The quarter concluded with the price for Anhydrous Ammonia Spot Ex Al Jubail in Saudi Arabia reaching USD 380/MT, indicating a positive pricing environment amid the ongoing market dynamics.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American ammonia market experienced a marked decline in prices, driven by several significant factors. The subdued demand from key downstream fertilizer markets played a central role, as climate-related challenges and extreme weather conditions disrupted normal planting activities. The lack of international inquiries, particularly from major importers, further exacerbated the situation. Although the price of natural gas, a critical feedstock for ammonia, kept fluctuating during this period, its impact on ammonia prices was limited due to the prevailing oversupply in the market.
Geomagnetic storms and weather anomalies led to planting suspensions, which, combined with ample supply and cautious purchasing behaviour, narrowed the demand-supply gap, reinforcing downward pressure on prices. As the quarter approached the end, he Drought Monitor released on June 20th, no areas of drought were reported in southern Minnesota and northwest Iowa. Despite this, farmers in the country have surprisingly adopted a wait-and-see approach to securing fertilizers, including Ammonia, as they anticipate further price decline.
The quarter concluded with an anhydrous ammonia price of USD 400/MT. CFR Tampa, underscoring the negative pricing environment. This consistent downward trajectory throughout Q2 2024 highlights the intricate balance between supply chain constraints and reduced market activity, resulting in a persistently negative pricing environment.
APAC
The ammonia market in the Asian region showed mixed sentiments throughout Q2 2024, particularly in China. Prices dipped during the first and third months but increased in the second month. The declines were driven by a surplus of ammonia in the Chinese market due to resumed operations at major plants and reduced demand for derivatives like acrylonitrile and amino acids. Anhui Haoyuan and Fujian Wanhua, two significant production facilities, began operations early in Q2, further boosting supply. Conversely, ammonia prices surged by 3.2% in May 2024 due to a resurgence in demand from both international and domestic markets and a noticeable shortage of ammonia. Heightened freight charges and delayed shipments due to port congestions also contributed. Average container prices surged by 26% from October 2023 to May 2024, and container leasing rates on key routes, such as China to the US, doubled since November, exacerbating shipping challenges. As a result, traders increased prices of various commodities, including ammonia, to maintain profit margins.
Europe
During Q2 2024, the European Ammonia market experienced a marked downturn in prices, reflecting a broader trend of decreasing valuations across the region. Unfavourable weather conditions, including harsh windstorms and floods, significantly dampened agricultural demand, particularly in the fertilizer sector. This decline in demand was compounded by an oversupply of ammonia, driven by ample inventories and smooth cargo inflows despite ongoing geopolitical uncertainties. Market participants reported a notable decline in fertilizer sales across Europe, a major factor driving this stagnancy. The adverse weather conditions disrupted agricultural activities, further reducing the need for fertilizers. Consequently, the ammonia market faced substantial challenges, resulting in decreased prices and an overall bearish market sentiment throughout the quarter. Additionally, the ongoing geopolitical uncertainties contributed to market instability, as concerns about supply chain disruptions and potential trade barriers remained prevalent. Despite these uncertainties, cargo inflows remained smooth, exacerbating the oversupply situation. The industrial sector, which is a significant consumer of ammonia for various applications, also showed reduced activity. This reduction in industrial demand, along with the subdued agricultural sector, led to a decreased overall uptake from downstream sectors.
MEA
The Middle Eastern Ammonia market experienced divergent trend during Q2. The prices declined during the first month of the quarter and increased during another two months. The prices declined by 7.7% in April 2024 from the previous month owing lower netbacks on contractual shipments to North African and Asian markets over the past few weeks. This decrease in netbacks has further contributed to the downward pressure Ammonia prices in the region. As the quarter progressed Ammonia. has witnessed a significant surge in ammonia prices across the Middle Eastern and African (MEA) region, driven by a confluence of factors that have reshaped market dynamics. Key among these influences is the notable increase in production costs, primarily due to the rising price of essential feedstock natural gas Geopolitical shifts, particularly China's strategic decision to halt fertilizer exports to India, have intensified demand pressures as Indian buyers seek alternative sources within the MEA region. Additionally, limited spot availability and constrained supply chains have compounded the upward price trajectory. These elements collectively underscore an environment of heightened market volatility and reduced supply elasticity, contributing to the pronounced price escalation observed this quarter.
South America
The South American ammonia market experienced growth during the first two months of Q2 but declined in the last month. The initial price surge was driven by increased demand from fertilizer markets, stimulated by favorable weather conditions. Following a year of record-setting global temperatures, we are nearing the end of a robust El Niño phase and transitioning to a La Niña phase, with persistently high temperatures. These climatic changes have spurred consumer enthusiasm to procure fertilizers for the upcoming planting season. The anticipation of a strong planting season, along with the crucial role of nitrogen-based fertilizers in enhancing crop yields, has driven market demand. Farmers and agricultural stakeholders are keenly aware of optimizing soil fertility to maximize productivity amid anticipated weather fluctuations. Consequently, the demand for nitrogen-based fertilizers, such as ammonia, remains robust as preparations for the planting season continue. However, ammonia prices dipped by 11.5% in June on a month-on-month basis due to the conclusion of harvesting activities in southern Brazil. Despite average yields amidst inconsistent rainfall and flood-related damages in May, there was sufficient availability of imported anhydrous ammonia cargoes. Increased water levels in the Panama Canal facilitated easier transit of vessels from the USA, a major exporter. Additionally, Petrobras, with a capacity of 475,000 tons per year, is operating effectively, ensuring a sufficient domestic supply of ammonia. These factors collectively contributed to the declining price of ammonia in Brazil.
For the Quarter Ending March 2024
North America
The North American Ammonia market faced a negative sentiments during first quarter in 2024, marked by subdued prices. The prices plunged by a significant margin of 20.6% throughout the quarter.
Fluctuating Natural Gas prices and declining demand contributed to this trend. Despite consistent demand from international markets, domestic demand remained weak due to unfavourable weather conditions, particularly impacting crop planting. Several major producers, including the Yara/BASF JV plant in Texas and U.S. Nitrogen LLC in Tennessee, experienced shutdowns caused by freezing weather, albeit without significant price effects. Additional shutdowns occurred at OCI Beaumont LLC in Texas and LSB Industries Inc in Cherokee, Alabama. The market experienced further challenges due to logistical disruptions on the Mississippi River, hindering barge resupply until mid-March. This bottleneck led to delayed shipments and increased port inventories.
Prolonged adverse weather conditions across the country dampened producer enthusiasm, as concerns about crop threats persisted. Fluctuating demand from major importing countries like Brazil, influenced by the approaching planting season and exacerbated by El-Nino-induced weather conditions, added to the market's volatility. Overall, these factors contributed to the subdued performance and pricing dynamics witnessed in the North American Ammonia market throughout Q1 2024.
APAC
The pricing of Ammonia in the APAC region during Q1 2024 saw significant volatility, influenced by various market dynamics. Prices declined in the initial two months due to ample material availability and subdued seasonal demand. Favourable weather conditions and increased domestic production contributed to enhanced supplies, while sluggish demand from the fertilizer industry post-peak planting season further impacted prices. Moreover, international demand, especially from Asia, was constrained by Chinese government restrictions on fertilizer exports until 2024. By late February 2024, shortages of Ammonia emerged in the Chinese market, driven by equipment malfunctions and sales stoppages at production facilities, particularly in northern China. Operational challenges disrupted manufacturing processes and delayed ammonia delivery, exacerbating supply shortages. Additionally, environmental regulations in Shandong province imposed further constraints on production, reducing ammonia output. Despite supply challenges, domestic demand experienced a modest uptick as preparations for the upcoming wheat and barley planting season commenced. Henceforth a potential price surge, resulting in a marginal 0.8% increase in prices in March 2024.
Europe
The European Ammonia market faced a challenging first quarter in 2024, characterized by a substantial 17.3% decline in prices in Russia. This decline was primarily attributed to reduced demand from the downstream fertilizer sector, compounded by an oversupply of ammonia and muted overall demand. Additionally, market sentiments were dampened by trade uncertainties and unfavourable weather conditions, particularly in Russia. The weather across Europe varied significantly during the quarter, with cold spells in the northern regions, excessive rainfall in central areas, and dryness in the Mediterranean. These weather patterns influenced agricultural activities and fertilizer demand, further contributing to the subdued market conditions. Despite these challenges, the temporary maintenance shutdown of the Novomoskovskiy Azot (Eurochem Group) plant had minimal impact on prices. However, ongoing farmers' protests, fuelled by rising energy prices, played a significant role in reducing farmers' buying enthusiasm. These protests added further pressure on the already subdued demand in the fertilizer sector. In response to the inventory pressures faced by traders, various strategies were employed, including adjustments to fertilizer prices, including ammonia. These efforts aimed to alleviate the impact of declining demand and lower production rates on market dynamics. However, despite these measures, prices continued to decline throughout the quarter.
South America
The South American Ammonia market faced a substantial 16.8% price decline in Q1 2024. Initially, January witnessed subdued demand due to seasonal factors and Carnival festivities, which temporarily slowed agricultural activities. Despite some consumers stocking up for the upcoming planting season, the overall market was affected. As the quarter progressed, domestic interest in Ammonia rose, but persistent drought conditions dampened enthusiasm among buyers. However, Brazil began receiving cheaper Ammonia cargoes from importing countries since mid-February, taking advantage of eased freight charges. This influx of affordable imports partially offset the domestic supply-demand dynamics. Despite trade uncertainties and droughts affecting the Panama Canal, traders exhibited resilience by adapting to alternative transportation routes, predominantly utilizing roads and air channels. This adaptability ensured a consistent supply of Ammonia to the Brazilian market, maintaining supply chain continuity. The increased activity in March, highlighted by exports ranging between 130,000 to 170,000 tons via road, demonstrated traders' agility in responding to evolving market conditions. Leveraging road transport allowed for swift navigation of geopolitical challenges and ensured prompt Ammonia delivery to customers, contributing to supply chain efficiency. These actions collectively narrowed the disparity between demand and supply, supporting the observed price decline in the South American Ammonia market.
Middle East
Throughout Q1 of 2024, the Middle Eastern ammonia market witnessed a notable bearish trend, characterized by declining prices predominantly attributed to a decrease in natural gas prices, a pivotal raw material in ammonia production processes. This market sentiment persisted as supply surpassed demand, resulting in an excess of ammonia supply within the region. Further exacerbating the market conditions were ongoing rebel attacks in the Red Sea, which disrupted the exporting process, causing delays and leading to an accumulation of ammonia inventories at ports. Despite weak international demand, a notable development emerged with China expressing demand following an agreement for a cargo from Indonesia. Saudi Arabia, a key player in the Middle Eastern ammonia market, experienced a significant price decline. This decline was attributed to the country providing cheaper exports to the Indian market, consequently increasing ammonia supply and resulting in higher inventory levels. Noteworthy during this period was the resumption of production at one of Saudi Arabia's major ammonia-producing plants, Ma’aden, which operated efficiently, further narrowing the disparity between demand and supply. In Q1 of 2024, the latest recorded price for Ammonia Spot Ex Al Jubail in Saudi Arabia stood at USD 290/MT, reflecting the prevailing market dynamics and indicating the impact of various factors influencing ammonia prices within the Middle Eastern region.
For the Quarter Ending December 2023
North America
The North American region witnessed a Bullish trend for Ammonia during Q4 2023. The market was primarily impacted by the following factors. Firstly, increase in the price of essential feedstock natural gas led to an increase in the production cost of Ammonia.
Secondly, the demand for Ammonia and its derivatives remained robust in the domestic market, particularly in anticipation of the forthcoming winter planting season, exerting upward pressure on prices. Lastly, the low availability of material within the regional market led to an increased price of Ammonia within the country. Further, as the Chinese government curtail its fertilizers exports international consumers particularly Indian players were active in the North American market. However, in December 2023 the prices declined by a significant margin in the wake of surplus availability of material within the North American market.
Prolonged drought conditions and persistent bottlenecks at the Panama Canal, a major trading route in USA has led to delayed exports and long ques. This has eventually led to a surge of inventories at the port. Further, during this period demand from South American region also remained restrained as the region is suffering from adverse drought conditions due to El-Nino effect. The interplay of these factors paved the way for narrowed disparity between demand and supply thus supporting the current price dip.
APAC
The Ammonia pricing for the APAC region in Q4 2023 remained volatile due to various factors affecting the market. The top three reasons for the volatility were the reduced fertilizer exports from China, lower availability of material in the market, and fluctuations in the feedstock prices. China experienced the maximum changes in the Ammonia prices during this quarter. At the onset of the fourth quarter the price of Ammonia within the Chinese market was increasing significantly amidst firm demand of the material from the domestic and international fertilizer market. Demand for Chinese Ammonia from major importing country India was the key factor behind driving up the Ammonia prices as the Indian consumers were actively procuring Ammonia for the Rabi crop planting season within the country. However, by the end of November 2023, Chinese government decided to curtail its fertilizer exports in an effort to reduce the domestic Ammonia prices. The government issued CIQ export licenses and adopted a stringent stance on exports, with reports indicating containers that had already been export-cleared being removed from vessels of fertilizers, including Ammonia. Henceforth, demand from international market remained muted. The interplay of these factors prompted towards narrowed gap between demand and supply thus supporting the current price dip. As a result, the prices of Chinese Ammonia felt by a significant margin in December 2023.
South America
The South America’s Ammonia pricing for Q4 2023 was impacted by various factors. Ammonia market unfolded bullish sentiments for the first two months of the quarter. However, as December approached Ammonia market in the Middle eastern region prevailed downward trajectory. In the initial phase of the quarter Brazil Ammonia market, the month unfolded with a decidedly bullish sentiment, driven predominantly by expensive imports from the USA market, and shortage of imported Ammonia within the domestic market. Major exporting nations particularly USA, experienced this escalation, prompting producers to adopt a cautious stance in expanding Ammonia production. Compounding the situation, a shortage of gas pipelines further constrained the availability of critical raw materials. Simultaneously, persistent bottlenecks at the Panama Canal added another layer of complexity, resulting in extended queues for ships. These disruptions not only impacted shipping schedules but also led to a subsequent rise in transportation costs, directly affecting the efficient flow of Ammonia shipments into the Brazil market. However, demand for Ammonia and other fertilizers remained restricted in the Brazil market despite the of Rice, Soyabean, Sorghum planting season as the country is suffering from prolonged drought conditions dur to El-Nino effect. Extremely hot weather conditions within the northern part of Brazil along with dry conditions during the first half of December 2023 worsened the situation of crops within the country. Simultaneously, temperature was cooler in the southern part of the country during the first half of the month, although tickled up later in the month. The split in wet weather in southern Brazil and drier weather farther north is being largely driven by El Niño, which is expected to persist into the first part of 2024. This has weakened the buying enthusiasm of fertilizer consumers in the wake of potential threat to the crops.
Europe
The European Ammonia market in the fourth quarter of 2023 was characterized by a bullish trend for the first two months and declined lately. Yara's temporary halt in Ammonia production contributed to the complexity of the supply dynamics, potentially causing a surge in spot demand and exacerbating the existing shortage in the European market. This shortage led to increased prices for Ammonia in the region. Further, demand for Ammonia remained firm from the international market during this period. After Chinese Government halted its fertilizer exports Asian consumers were active in the western market. However, as December approached demand from Asian market declined as the peak planting season has passed. Further, adverse weather conditions within the region along with heavy rainfall posed to be a potential threat for the crops. This has further dampened the buying enthusiasm of Ammonia consumers for Spring 2024. Additionally, trade uncertainties amidst rebel attacks in the Red Sea had caused the traders to opt for alternative trade route. In an effort to avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean. This has created a multiple-front storm for global trade, leading to a surge in European port inventories. The interplay of these factors prompted towards narrowed gap between demand and supply.
MEA
The MEA region's Ammonia pricing for Q4 2023 was impacted by various factors. Ammonia market unfolded bullish sentiments for the first two months of the quarter. However, as December approached Ammonia market in the Middle eastern region prevailed downward trajectory. The price increase in the initial phase of the quarter was driven by shortage of supplies within the market. One of the major Ammonia producers reduced its production rate causing a shortage of supply. Further, during this period the international demand for Ammonia rose, especially after China continued to curtail its fertilizer exports, leading to an upward trend. Further, during November 2023 the Middle Eastern market faced challenges due to factory device failures, partial sales stoppages, and a constrained supply. However, as December approached demand from Asian market declined as the peak planting season has passed. Further, demand from European market also remained restricted during this period amidst adverse weather conditions within the region along with heavy rainfall posed to be a potential threat for the crops. Additionally, trade uncertainties amidst rebel attacks in the Red Sea had caused the traders to opt for alternative trade route. In an effort to avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean. This has created a multiple-front storm for global trade, leading to a surge in port inventories. The interplay of these factors prompted towards narrowed gap between demand and supply.
