Ammonia Prices In Germany Increased As Demand Spiralled
Ammonia Prices In Germany Increased As Demand Spiralled

Ammonia Prices In Germany Increased As Demand Spiralled

  • 04-Jul-2022 5:32 PM
  • Journalist: Motoki Sasaki

In June and July, Ammonia prices experienced a rapid increase fuelled by a global scarcity and high demand on the worldwide market. Although plenty of downstream Urea is available this month, the cost of numerous Ammonia-based fertilizers, including Urea, increased nationwide. This price increase was due to worldwide demand for Ammonia amid suspended imports. Due to the container shortage, prices were rising throughout Europe, making it difficult for traders to obtain cargoes in the nation.

Due to a shortage, Ammonia prices have increased in Germany. Reduced imports from Russia have contributed to the severe scarcity brought on by limiting supplies from 50% to 35%. But because natural gas prices are so high, production procedures are taking forever.

Germany raised its caution last week, allowing it to carry out plans to increase coal-fired electricity generation and raise prices to stifle demand. As a result of Russia's significant supply restrictions, the rate at which storage facilities are being refilled has slowed, raising the prospect that supplies will not be sufficient to keep households warm during the upcoming winter.

As Germany suffers from Russia's dwindling supply, SKW Piesteritz, a producer of Ammonia and Urea, is about to suggest a force majeure if natural gas prices rise and supplies are restricted.

Germany, which primarily relies on Russian gas, is threatened with gas rationing and steep price increases, which might lead to a decline in industry and supply chain issues. Already under stress from inflation and weak growth, the European economy is being further pressured by high gas costs causing sectors to reduce demand.

As stated by ChemAnalyst, "Ammonia prices are anticipated to follow the trajectory of rising natural gas prices. However, European industries have increased their imports of Liquefied Natural Gas and have gotten more long-term supply contracts, primarily from US suppliers. European industries are having issues due to the oil and gas shortages."

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