Price of Ammonium Nitrate surged dramatically this month due to a steep surge in raw material ammonia and nitric acid costs and strong demand from the local market. India's current fertiliser inventory is insufficient to fulfil the market's expected seasonal demand. The supply remained insufficient to meet the country's total needs, while demand from the fertiliser and mining industries remained strong. Furthermore, rising raw material Ammonia shortage, as well as inflationary pressure and logistical challenges, remained important concerns for this price increase. Following a considerable price increase, Ammonium Nitrate prices were seen hovering at INR 49120/MT Ex-Mumbai in January.
However, the outlook for fertilizer is still bright. The sector is experiencing tremendous demand from both domestic and international customers. To meet this growing demand, a technological Ammonium Nitrate complex is being built, according to Deepak Fertilisers'. Once finished, the project will assist Odisha in becoming a main supply source for technical Ammonium Nitrate, serving the entire Eastern area, which is predicted to account for most of the future mining expansion.
As per ChemAnalyst, according to current demand supply dynamics, Ammonium Nitrate prices are projected to stay strong in the following month, as domestic demand is expected to be increasing. Furthermore, increased raw material costs may force manufacturers to pass on high production expenses to customers. Additionally, a market participant cautioned that "we may witness another large increase in price in the following month.
