For the Quarter Ending March 2022
Ammonium Nitrate prices have seen an upward price trajectory in Q1 2022 on the back of increasing feedstock prices, particularly Ammonia gas, which is one of the critical materials in Ammonium Nitrate production. The price of AN has been impacted by rising natural gas costs, which are crucial in its manufacture. Downstream end users, majorly farmers, were compelled to increase the pricing for their products to widen their profit margins. Ammonium Nitrate is one of two primary forms of nitrogen fertilizer, with urea being the other. Prices were higher in mid-March than a month before the invasion. Tariffs on fertilizers were also questioned as fertilizer prices and supply were causing concern worldwide. Ammonium Nitrate price averaged during the first quarter were USD 360/tonne.
Ammonium Nitrate prices in China have regularly climbed in Q1 2022 because of continuous supply chain challenges, weather-related disruptions, and higher shipping container costs, which are likely to lead to shortages and higher fuel fertilizer prices. Russia has also imposed temporary export restrictions and fertilizer bans in recent months. Rising fertilizer costs undermined farmers' profit margins, resulting in higher pricing for downstream customers during Q1 2022. As a result, FOB-Qingdao offers for Ammonium Nitrate in China during the last week of February were quoted at USD 805 per metric tonne. There has been some recovery from downstream demand in the APAC region market following the spring festival, which has pushed prices even higher. This has been primarily due to a steep jump in Natural gas costs, used to make most nitrogen fertilizers such as Ammonium Nitrate. In India, the price of Ammonium Nitrate ex-Ahmedabad was estimated to be USD1001/MT.
Ammonium Nitrate levels in Europe remained high in Q1 2022 due to increasing energy prices, rising feedstock prices, and growing inflation rates. In the first quarter, Ammonium Nitrate (AN) quotations ranged USD930-1000/MT due to sky-high raw material costs and concerns about the security of previously limited fertilizer supply. Furthermore, since February, Russia has prohibited the export of Ammonium Nitrate, and gas prices have continued to rise, forcing fertilizer prices to reach new highs. European gas prices reached a new high, more than doubling the threshold at which production was halted. As a result of rising gas prices, Yara, a European manufacturer, had suspended production at nitrogen factories in Italy and France. CFR Northwest Europe's price was reported at USD 1,140/MT during the first quarter ending March 2022.
For the Quarter Ending December 2021
Ammonium Nitrate was in high demand in the North American market this quarter. Rising Ammonia prices, combined with strong demand from various sectors such as DAP and Urea, had an impact on Ammonium Nitrate pricing during this timeframe. Furthermore, surging Natural Gas prices influenced the prices of several fertilisers in the United States. In the United States, the price of Anhydrous Ammonia FOB New Orleans rose and settled at USD1280/MT during December. Additionally, input costs such as fertiliser, fuel, and transportation are putting pressure on farmers' budgets around the world.
Due to high demand from the domestic market and rising raw material costs, Ammonium Nitrate prices were constant in the fourth quarter. Although supply was insufficient to meet the region's total demands, demand from the fertiliser and mining industries remained high. Moreover, rising raw material Ammonia costs, as well as inflationary pressure and logistical constraints, were also major factors in this price hike. In December, Ammonium Nitrate prices were hovering at INR 68740/MT Ex-Mumbai, following a significant price hike. Furthermore, China's recent limitations on fertiliser exports have sparked global worries.
During the first quarter of 2021, there was a severe shortage of Ammonium Nitrate in the North American market. The supply of feedstock chemicals Ammonia and Nitric Acid decreased significantly after winter storm Uri hit the US Gulf Coast in February, owing to reduced industrial activity. However, demand for fertilisers was halted for more than a month because of snow and frequent rains, which curtailed farming activity during that time. This demand successfully strengthened in November before the festive season, and total Ammonium Nitrate price improved by more than 20% during the quarter.
In Q3 of 2021, the US Ammonium Nitrate market remained buoyant with surging demand from the downstream agriculture sector. As the economic recovery had been steadily progressing towards pre-pandemic levels, prices of Ammonium Nitrite witnessed an uptrend. Supplies remained tight throughout the quarter owing to the rising costs of upstream Ammonia as an impact of Ida hurricane that made landfall in the Gulf Coast of USA in August end. As the US market is looming large following the energy crisis due, Ammonium Nitrite prices are expected to continue tracing the trend going into Q4.
In Asia, Ammonium Nitrate market witnessed an upward rally followed by the steep rise in the prices of upstream Ammonia and sturdy offtakes from the downstream segments during Q3 of 2021. In India, an exponential rise in the prices of Ammonium Nitrate was witnessed throughout the quarter on the back of the steep rise in raw material cost amid high demand from the domestic market. In addition, the inventory level of fertilizers in India was not enough to meet the seasonal demand requirements which consequently pushed up the prices of the product during this timeframe. However, to protect farmers from the price burden, government made efforts to control frequent revisions in prices of Ammonium Nitrate in the region. Besides, restrictions on fertilizers exports by China also concerned traders about the supply. Hence, Ammonium Nitrate Ex-Ahmedabad prices stood at USD 1662.83 per MT in September, showcasing a significant hike since July.
In the European market, prices of Ammonium Nitrate soared as the demand for fertilizers from the domestic and international market surged in Q3 2021. Consistent rise in the values of raw materials in the international market further escalated the prices of Ammonium Nitrite across the region. Moreover, swirling freight charges and rising demand for Ammonium Nitrite for downstream applications resulted in an uptrend in values in the European region.