Global Ammonium Sulphate Market Faces Challenges Amidst Weak Demand and Trade Uncertainties
- 08-Jan-2024 4:23 PM
- Journalist: Nina Jiang
In December 2023, the Ammonium Sulphate markets in both the European and North American regions showed a subdued state. The global decline in prices is primarily attributed to an oversupply of the material and a lack of strong demand from the domestic fertilizer market. During this period the fertilizer market experienced reduced activity, with producers prioritizing contracted volumes over potential spot availability expected in January.
The European market witnessed a noticeable decline in Ammonium Sulphate prices during December 2023. This price downturn is primarily attributed to subdued demand from the significant downstream fertilizer sector. As the year approached its end, characterized by minimal activity and persistent subdued spot demand, adverse weather conditions in the UK, France, and Germany exacerbated the situation. This weather-related impact poses a potential threat to the demand for Ammonium Sulphate in fertilizers for early 2024. Despite the conclusion of the winter planting season, the inventory of Ammonium Sulphate has not been depleted to the anticipated extent due to continuous wet weather conditions.
Similarly, the Ammonium Sulphate market in the United States witnessed a significant decline in prices. This price downturn is primarily attributed to limited demand for Ammonium Sulphate, both in the international and domestic fertilizer markets, exacerbated by substantial stockpiles within the nation. Ongoing challenges at the Panama Canal, a crucial global trade route originating in the USA, have also contributed to this situation. Further, some shipping companies are choosing alternative trade routes over the Suez Canal due to concerns about potential threat of rebel attacks. The limitations at the Panama Canal have prompted certain shippers to reroute exports of various commodities including Ammonium Sulphate, through the Suez Canal to access Asian markets. If constraints at the Suez Canal persist, it may become increasingly challenging for the US to export Ammonium Sulphate, potentially leading to an oversupply within the domestic market and subsequent reduction in prices.
Due to delayed shipments to the international market, there has been an accumulation of Ammonium Sulphate inventories within the country. Furthermore, the demand for Ammonium Sulphate remained subdued in the United States, aligning with the conclusion of the peak fertilizer season. Globally, there has been a lull in market activity as producers have given precedence to contracted volumes over potential spot availability in January. Particularly, the Ammonium Sulphate market in Brazil, a significant importing nation, has been subdued, marked by the absence of any new deals amidst prolonged drought condition within the country. Moreover, as the season approaches its conclusion and buyers possess ample stock, there is no pressing need for additional purchases. The interplay of these factors has led to a reduced disparity between demand and supply, thereby reinforcing the present decline in prices.
As per ChemAnalyst, an anticipated decrease in Ammonium Sulphate prices is foreseen in the global market in the coming months. This downward trend is primarily attributed to depreciated demand from the prominent downstream fertilizer sector.