Ammonium Nitrate Prices Soar in The Asian Market
- 06-Jun-2022 5:20 PM
- Journalist: Jacob Kutchner
Mumbai, India: Major fertilizers, such as Ammonium Nitrate, have increased by 200 percent since 2021, causing farmers to pay more for crop production. Many factors include the current situation, notably the conflict in Ukraine, as Russia, Belarus, and Ukraine are all crucial exporters. Furthermore, increased gas costs due to the conflict have added to the strain on Nitrogen fertilizers, as many of them are made using energy-intensive processes.
Ammonium Nitrate prices in India skyrocketed in May, owing to soaring raw material costs and low imports. Despite rising domestic use, the price of Ammonium Nitrate remained high, owing to supply disruptions caused by Russian sanctions and export restrictions in China. On the other hand, the pandemic situation altered price dynamics, which may persist if the number of infections increases in the following weeks. Furthermore, traders are concerned about growing freight costs, reducing their margin, and forcing them to pass the cost on to terminal users. As a result, the price of Ammonium Nitrate surged this month, hovering around INR 140800/MT Ex-Mumbai and INR 143700/MT Ex-Ahmedabad by the end of the month.
Ammonium Nitrate fertilizer manufacture is a time-consuming procedure. At room temperature, one of the significant building ingredients, Ammonia, is a gas that must be mixed with Nitric Acid to form fertilizer. Ammonia and Nitric Acid prices are currently at the highest pricing peaks; thus, it’s difficult for the manufacturers to procure Ammonium Nitrate. This reaction results in Ammonium Nitrate, a solid whitish chemical that is relatively stable, safe, and easy to work with.
In May, the Indonesian market for Ammonium Nitrate saw a minor increase of about 1%. Buyers in Southeast Asia were cutting down on contracted volumes, limiting industrial demand. Meanwhile, the crisis between Ukraine and Russia has heightened concerns about nitrogen prices and availability. Ex-Bontang pricing negotiations for Ammonium Nitrate hovered around USD 790 per Metric Ton towards the end of May, following an upward trend. However, some stalled Ammonia production in Europe is expected to resume, perhaps alleviating some market tightness soon.
The Ammonium Nitrate market in China, which has been perpetually bullish over the last month, saw a modest rise in prices in May due to the reeling impact of higher demand. As a result, demand has outstripped supply this month. Thus, by the end of May, the Ex-Shandong price negotiations for Ammonium Nitrate had reached USD 735 per metric tonne.
As per ChemAnalyst, “Fears of supply constraints pushed increased demand for Ammonium Nitrate in the downstream agriculture and mining industry. Prices of Ammonium Nitrate are thus expected to increase in the Asian market.”