Ammonia Prices Incline in USA against Curtailed Supplies, Asia Appears Otherwise

During the initial week of April 2024, concluding on the 5th of April, the Ammonia market exhibited contrasting trends in the Asian and North American regions. In the North American market, prices experienced a notable increase of 1.7%. This surge can be attributed to a shortage of material, compounded by moderate demand from critical downstream fertilizer markets. However, in the Asian market, prices declined significantly by 5.5%. This decline was driven by reduced demand for Ammonia and its essential downstream derivatives, particularly Urea and Acrylonitrile.

In the North American Imported Anhydrous Ammonia market, prices saw a modest uptick following a period of stability. This increase stems from a shortage of material coupled with heightened import costs. Trinidad, a significant exporter of Ammonia, faced severe natural gas shortages crucial for production, leading to reduced exports. The recent gas outage in Trinidad in late March 2024 disrupted Ammonia production at various plants, exacerbating the material shortage and decreasing exports. Moreover, the maintenance turnaround at Yara's Tringen 1 facility in Trinidad lasting 20 days further strained the supply. Compounding these challenges, persistent drought conditions along the Panama Canal disrupted shipments, exacerbating the supply situation. Water levels in Panama's Gatun Lake remained stagnant at 80.5 feet for a second consecutive week as of March 28, keeping the freshwater surcharge constant at 2.89%.

Additionally, a modest resurgence in demand from the downstream fertilizer market was observed during this period, driven by the upcoming Barley and Oats planting season within the country. This renewed demand further widened the gap between supply and demand, ultimately supporting the current price hike in the North American Imported Anhydrous Ammonia market. The intricate interplay of these factors underscores the delicate balance between supply and demand in the market. Despite efforts to mitigate the shortages, challenges persist, driving prices upward and highlighting the vulnerability of the North American Imported Anhydrous Ammonia market to external factors.

On the contrary, the Chinese Ammonia market saw a decline this week due to increased supply, notably from resumed production at major facilities like Anhui Haoyuan and Fujian Wanhua. These facilities ramped up operations, resulting in surplus Ammonia availability domestically. Consequently, both domestic and international demand for Ammonia remained subdued. Sierbang, a key petrochemical company, saw softened demand domestically, while internationally, factors like ongoing harvesting activities in India contributed to restrained demand. Despite expectations of increased demand from the fertilizer industry for the upcoming planting season, adverse weather conditions tempered this anticipation.

According to the analysis by ChemAnalyst, it is anticipated that the Ammonia market will undergo a downtrend in the upcoming months. This projection is primarily attributed to a reduction in seasonal demand and expected surge in inventories.