For the Quarter Ending September 2022
North America
Ammonium Nitrate prices remained stable to firm in the North American region, prompted by sufficient supply and weak purchasing appetite. The declining values of feedstock Crude Oil and Ammonia imparted negative cost pressure in the market fundamentals of the regional market. Production rates remained optimum despite weak consumption rates in the American market. Supply chains have remained a cause of concern for US manufacturers in the past few quarters. Logistics constraints and port congestions in US Gulf and East Coast have worsened the supply dynamics. The demand disruption from the downstream agriculture industries amidst Hurricane Ian has hampered the demand fundamentals and impacted the regional market's trading sentiments during the third quarter of 2022.
APAC
In the Asia Pacific region, the price trend of regional Ammonium Nitrate plunged during Q3. The low price was primarily due to sluggish demand. The price of raw material liquid Ammonia in the market has recently varied, while the price of Nitric Acid has stayed on the lower side. The requirement for Ammonium Nitrate was adversely affected by the cheap cost of raw materials, while the downstream demand from the explosive industry's sales had halted. The market situation has remained bearish, majorly in the APAC region. Ample supplies are reported in the regional market as operating rates decreased in the regional market due to high energy costs.
Europe
In the European region, Ammonium Nitrate prices surged with limited supplies and uncertain geopolitical climatic conditions. The Supply Situation remained under pressure as the industrial operation rates were moderate, but supply was reduced along with a declined level of inventories. As most of the materials were being exported to Asian countries, which led to limited material availability in the regional market. The downstream demand from mining and Explosives industries was moderate due to their average performance in the regional market. Supply constraints and worries about inflation have aided Ammonium Nitrate prices to surge to record or multi-year highs. Rising Ammonium Nitrate prices have been fuelled by the squeeze in Russian gas supplies and increased EU demand.
For the Quarter Ending June 2022
North America
Ammonium nitrate was in great demand in the North American market this quarter. Pricing for ammonium nitrate has been affected this quarter by rising ammonia costs and increased demand from downstream sectors. Additionally, growing Natural Gas costs impacted the price of various fertilisers in the US. The price of ammonium nitrate on a FOB basis climbed during June and reached a high of USD 980/MT in the US. Additionally, the cost of inputs like fertiliser, gas, and transportation is putting a burden on farmers' finances all around the world. Ammonium nitrate prices significantly increased this month in the US market due to the ongoing agricultural season. The primary causes of this sharp price increase include rising Ammonia raw material costs amid increased demand from end-users.
APAC
May saw a sharp increase in the price of ammonium nitrate in India because of rising raw material costs and low imports. The price of ammonium nitrate in Indonesia increased by a negligible 1% in May. Southeast Asian buyers' reduced contracted volumes constrained demand for industrial goods. Concerns over the cost and availability of nitrogen have also increased due to the conflict between Russia and Ukraine. By the end of May, ex-Bontang ammonium nitrate prices were rising and circling around USD 790 per metric tonne. China, which has been consistently bullish over the past quarter, had a little price increase this month because of the domino effect of increased demand. Demand has therefore exceeded supply.
Europe
Ammonium Nitrate increased in the European region during Q2 2022. Following an energy shortage that slowed production in Europe, fertilizer prices have soared to new highs worldwide, while export restrictions and trade sanctions limited the fertilizer supply in Europe. Furthermore, the increasing shortage of raw material Ammonia and inflationary pressure, and logistical issues remained the significant reasons for this price hike in the global market. The recent Ammonium Nitrate prices in the European Market were assessed at USD964-972/MT, following a significant price hike this quarter. Ammonium nitrate's price has risen dramatically this month due to a sharp increase in raw material Ammonia and Nitric Acid costs and significant demand from the downstream fertilizer and mining sector. Russia, one of the largest exporters of urea, curtailed shipments in December 2021 and halted exports of Ammonium Nitrate in Q1, which lingered in this quarter also. Due to an increase in the price of natural gas, the key raw material for nitrogenous fertilizers.
For the Quarter Ending March 2022
North America
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.
Asia Pacific
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.
Europe
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.
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.
