Despite Robust Demand, Prices Of Anhydrous Ammonia In The USA Experienced A Decline In April And May 2023

Fertilizer Outlook

April witnessed robust demand for pre-plant fertilizer, which was received well following the previous year's disappointing performance led by high costs and bad weather conditions. Prices of Anhydrous ammonia failed to meet expectations as tardy price revision overlapped with the spring pre-plant period, during which offers fell by half compared to 2022-end.

Ammonia

In spite of rising spot demand for anhydrous ammonia, prices dropped in April due to frail market sentiment, which stressed prices. This contradicted with high U.S. stock amounts, which were bought over USD 1,000 per short ton (t) (FOB or sale price/ ton excluding transportation costs) in 2022-end, which caused a dispute between sellers for higher values and restricted losses.

Prices for ammonia in the U.S. will likely persist on a downward slope once the product's spring rush is over, pursuing the global market situation. During the period when logistics stay restricted through trucking routes, the U.S. began spring with a significant length in the market, averting the usual price spikes expected for the period.

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In Europe, cheaper production rates stressed the global ammonia prices in the market during April, continuing the trend over last year with European nations being swing producers while Russia's ammonia supply stayed restrained.

The near-term outlook for ammonia prices includes a continuous fall during summer across both hemispheres as European production costs drop. One more decline is anticipated in next month's Tampa ammonia price.

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As per the article by Procurement Resource, the global market outlook for ammonia is not looking good as tardy price revision for Anhydrous ammonia overlapped with the spring pre-plant period, during which offers fell by half compared to 2022-end.

The market sentiment across U.S. and EU both looks gloomy. Hence, in the short term, prices are anticipated to follow a downward trend during summer across both hemispheres as European production costs drop.