Ammonia Prices Are Expected to Rise By 8-10% In March as Natural Gas Prices Rise Amid

Ammonia prices in China have consistently risen because of ongoing supply chain issues, weather-related disruptions, and higher shipping container costs, all of which are likely to lead to shortages and fuel fertiliser prices. In recent months, Russia has also implemented temporary export curbs and fertiliser prohibitions. Farmers' profit margins are being eroded by rising fertiliser costs, resulting in increased prices for downstream customers. As a result, FOB-Qingdao offers for Aqueous Ammonia in China have been quoted at USD 805 per metric tonne during the last week of February.

In the Chinese market, there have been some recovery from downstream demand following the spring festival which further took prices on a higher note coupled by a sharp rise in Natural gas prices, which is used to produce most nitrogen fertilisers such as Ammonia, has been primarily responsible for the price increase.

Russia is a key global supplier of fertiliser and related raw resources such as sulphur. Russia was the greatest exporter of urea, NPKs, ammonia, UAN, and ammonium nitrate in the world last year, as well as the world's third-largest exporter of potash. The majority of the globe relies on Russian fertiliser exports, and as the situation becomes more volatile, upstream commodities such as natural gas follow suit. In the case of a conflict, the worldwide price of oil and liquefied natural gas (LNG) is likely to rise considerably, which will benefit the Asia Pacific region's few producers while hurting the region's vast majority of net energy importers.

As per Chemanalyst, “The prices for Ammonia in the Asian markets are expected to surge by 8-10% in March and April as the demand from downstream fertilizer industry is likely to remain strong, consequently adding pressure on the prices. Lack of Russian import volumes coupled with high upstream values are anticipated to take the prices on an upward rally. “