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Ammonium Nitrate Price Rises, as Europe Struggles with the Energy Crisis

Ammonium Nitrate Price Rises, as Europe Struggles with the Energy Crisis

Ammonium Nitrate Price Rises, as Europe Struggles with the Energy Crisis

  • 28-Oct-2022 3:13 PM
  • Journalist: Patrick Knight

Ammonium Nitrate costs are rising due to high natural gas prices. European firms are struggling to remain competitive amidst increasing energy prices. The fertilizer industries are struggling to maintain efficiency as the upstream natural gas prices are 15 times higher than pre-crisis levels, ten times higher than prices in the United States, and much higher than in Asia, according to the Fertilizers Europe group.

Ammonium Nitrate prices surged quickly during October 2022 due to persistent supply shortages, mainly due to curtailed production activities at some of the significant players in the world. Ammonia based fertilizers uses natural gas as a key raw material, which is being hampered by the increasing utility costs.

The absence of Russian Ammonium Nitrate shook the worldwide Ammonium Nitrate market. The regular maintenance shutdowns strain the region's Ammonium Nitrate supplies. Because Russia is the world's largest exporter of Ammonium Nitrate, supply and inventory constraints supported this pricing dynamics. Russian Ammonium Nitrate prices for October 2022 are estimated at USD 595/MT on a FOB basis.

The rise in fertilizer prices has attributed to several factors, including a recovery in demand, various supply disturbances, trade restrictions, and escalated raw material costs. The price of producing fertilizer is closely tied to energy prices, especially in the case of nitrogen fertilizers.

Despite the prolonged firmness in energy prices, operating rates for domestic production were kept in check.

As per ChemAnalyst Analysis, there is a strong expectation that Ammonium Nitrate prices will remain where they are currently, even in November. "Prices for Ammonium Nitrate have increased significantly since last year due to rising inflation. The supply is expected to be constrained, and operating rates are anticipated to remain impacted by the high cost of natural gas in the upstream.

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