Weak Demand and Oversupply Triggers Ammonium Chloride Prices to Slide in April 2023
Weak Demand and Oversupply Triggers Ammonium Chloride Prices to Slide in April 2023

Weak Demand and Oversupply Triggers Ammonium Chloride Prices to Slide in April 2023

  • 27-Apr-2023 5:39 PM
  • Journalist: Gabreilla Figueroa

Prices of Asian Ammonium Chloride continued to decline for another month on the back of narrowed demand-supply gap. The supply of the material continued to be abundant for the importers while demand was assessed to be limited for the material. Amidst abundant supply of Ammonium Chloride in China, manufacturers were assessed of slowing the production down of the product. In addition, the declining trend of coal and natural gas in the country had further resulted in the lower cost of production consequently paved the way for feedstock Ammonia to follow downward trajectory. As a result, a drop of around 5% was observed for Ammonium Chloride prices in the Chinese market during April 2023.

In India, there was minimal demand for Ammonium Chloride in the spot market and the market appears to be closing on a bearish note as traders prepared to keep selling off at discounts to strengthen trading movement in the coming months. The muted trading activity due to a lack of interest from market participants in purchasing the material pushed the prices of Ammonium Chloride downwards. This was attributed to the plentiful supply of Ammonium Chloride in India and the low demand from downstream fertilizer industries.

Reduced quotations for Ammonium Chloride are also a result of manufacturers cutting back on output in the domestic market and reduced feedstock Ammonia costs. These reasons make suppliers in the Asian market hesitant to raise prices and unsure of when demand for the material would increase.

As per ChemAnalyst, the price of Ammonium Chloride may increase in Q2 under the optimism of possible rise in demand. Only China is slightly engaged on the global Ammonia market, where prices are reported to be USD 350/MT CFR. Prices in Southeast Asia are estimated to be between USD 300/MT and USD 310/MT. Production declines are quite prone until raw material Ammonia prices rise.

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