Global Ammonium Chloride Market Prevails Mixed Sentiments in January 2024
- 12-Feb-2024 5:48 PM
- Journalist: Gabreilla Figueroa
During January 2023, the global Ammonium Chloride market witnessed a mixed trend. Prices surged in western countries, while experiencing a decline in the Asian market. The upward trend observed in the western region can be attributed to a combination of factors, including escalated shipping costs due to uncertainties prevailing in the global trade environment, a shortage of crucial feedstock Ammonia, and a resurgence in demand from significant downstream fertilizer markets. Conversely, in the Asian market, an abundance of supply coupled with diminished demand exerted downward pressure on Ammonium Chloride prices.
In the American region, there was a significant increase in Ammonium Chloride prices on a month-on-month basis. At the onset of the month, a moderate surge in demand for Ammonium Chloride was observed in both the North American and South American fertilizer markets. This rise in demand was attributed to favourable weather conditions and the alleviation of drought conditions in these areas. Concurrently, there was a consistent demand for fertilizers, including Ammonium Chloride, in the South American market, driven by the ongoing planting season for crops such as Corn, Cotton, and Sorghum.
The amelioration of prolonged drought conditions in Rio de Janeiro, precipitated by heavy rainfall, was regarded positively in the region. However, as the month progressed, a decline in production activities became evident due to severe winter conditions, including freezing temperatures and snowstorms. These adverse conditions resulted in the closure of significant facilities such as the U.S. Nitrogen LLC plant in Tennessee and the Yara/BASF JV plant in Texas, prompting concerns about broader impacts on the supply chain. Additionally, a disruption in the Ammonia gas pipeline at the Bethpage ice rink, caused by a compressor malfunction, led to an Ammonia shortage in the region. This scarcity of a critical raw material exerted upward pressure on downstream derivatives, notably affecting Ammonium Chloride prices.
Conversely, the Chinese Ammonium Chloride market experienced a notable decline in January 2024. This decrease in prices can be attributed to several factors, including an excess supply of the material, reduced demand, and lower production costs. The decrease in the price of the essential raw material, Ammonia, and Thermal Coal, prompted a reduction in production rates within the country, thereby exerting downward pressure on Ammonium Chloride prices. Additionally, China remains absent from the market until possibly the end of March due to the government's imposition of strict export restrictions aimed at controlling domestic Ammonium Chloride prices. However, demand from the domestic fertilizer market was moderately low, with only a few bids or inquiries heard by the end of the month in anticipation of the forthcoming planting season within the country.
According to projections from ChemAnalyst, the Ammonium Chloride market is expected to experience an upward trend in the global market. There is anticipated to be a significant increase in global Ammonium Chloride prices in the coming months, driven by a shortage of essential feedstock.