What Causes Dramatic Drop in Nitrogen Fertilisers

Houston, USA: Nitrogenous fertilizers prices fell by 30% in the last week, partly due to the muted demand from the downstream industries in the United States. Moreover, the purchasers are refusing to pay the record high prices witnessed in April and early May in Southeast Asia and elsewhere, while the cost of Ammonia production has dropped as Natural gas prices fell during the second quarter of 2022.

Fertilizer prices have been growing since the beginning of the last quarter, owing to the COVID- 19 epidemic's ramifications for manufacturers and the Russia-Ukraine conflict, which has pushed up input prices, influenced by unpredictably geopolitical tendencies. Countries hurried to find new trustworthy sources of vital fertilizers and components after Russia invaded Ukraine. When supply surged in anticipation of the spring planting season, prices fell to around USD 1655/ MT from around USD 1600/ MT, representing a USD 55/ MT drop in the US during May.

On Wednesday, Natural gas futures fell as much as 8, retreating from a further than seven- time high of over USD6 per million British thermal units. likewise, Natural gas futures fell slightly in the early hours of Friday morning as the global market sought to rebalance after a steep rise. Indeed, with the drop, prices are still 87% higher than a year ago, and supply chain issues continue to inflict havoc on global markets.

As per ChemAnalyst, “On the backdrop of falling upstream Natural Gas and muted demand, the prices plunged. However, the decline is not likely to persist for a longer time as demand and upstream values, both are likely to recover with the commencement of June. ChemAnalyst anticipates borderline fluctuations for Ammonia, Urea and Nitrates on an upward note. Therefore, prices of all Nitrogenous fertilizers are anticipated to rise in the near term.”