Bearish Price Momentum Begins for European Ammonium Sulphate
Bearish Price Momentum Begins for European Ammonium Sulphate

Bearish Price Momentum Begins for European Ammonium Sulphate

  • 19-Oct-2022 4:46 PM
  • Journalist: Nina Jiang

This week, Ammonium Sulphate prices declined in Europe as some sellers reduced the product's costs to lower levels, where buyers were willing to re-participate. However, High European natural gas prices continued to drive expectations of solid demand in the fourth quarter of 2022 as regional participants sought to replace local production with imports.

On the demand side, the fears of recessions continued to weigh down on regional demand. The downstream industry's demand for Ammonium Sulphate has decreased. On the one hand, the compound fertilizer industry's operating rate fell by 5.8% to an absolute low of 24.28%, and the autumn fertilizer season is concluding. Manufacturers are less willing to produce in the face of increased demand uncertainty. Regarding agricultural Ammonium Sulphate demand, moderate storage orders and stock replenishment have supported the market, although the support is only temporary.

The price of Ammonium Sulphate in Europe remains under pressure. In Romania, prices are falling, and other markets are also showing signs of instability. The potential of raising taxes on Russian fertilizer shipments before the budget is established next year appears to be growing. Overall, market sentiment is still negative. In the medium term, certain remaining  Ammonium Sulphate demand for Rabi may strengthen their support to the east of Suez.

The majority of Europe's Ammonia production capacity has been shut down with a considerable percentage this week due to economic challenges that spurred a significant increase in Ammonium Sulphate import activity. Sanctions continue to affect trade flows as there are substantial disparities between regions due to the limited market options for producers in Russia, Venezuela, and Iran.

As per ChemAnalyst, Strong supply fundamentals, a bullish trading sentiment, and European buying support the market as it begins a new climb. Trading activity will likely slow down due to the market's return to levels previously severely destroyed demand.

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