North America

The North American region witnessed a Bullish trend for Ammonia during Q4 2023. The market was primarily impacted by the following factors. Firstly, increase in the price of essential feedstock natural gas led to an increase in the production cost of Ammonia. 

Secondly, the demand for Ammonia and its derivatives remained robust in the domestic market, particularly in anticipation of the forthcoming winter planting season, exerting upward pressure on prices. Lastly, the low availability of material within the regional market led to an increased price of Ammonia within the country. Further, as the Chinese government curtail its fertilizers exports international consumers particularly Indian players were active in the North American market. However, in December 2023 the prices declined by a significant margin in the wake of surplus availability of material within the North American market. 

Prolonged drought conditions and persistent bottlenecks at the Panama Canal, a major trading route in USA has led to delayed exports and long ques. This has eventually led to a surge of inventories at the port. Further, during this period demand from South American region also remained restrained as the region is suffering from adverse drought conditions due to El-Nino effect. The interplay of these factors paved the way for narrowed disparity between demand and supply thus supporting the current price dip. 

APAC

The Ammonia Prices for the APAC region in Q4 2023 remained volatile due to various factors affecting the market. The top three reasons for the volatility were the reduced fertilizer exports from China, lower availability of material in the market, and fluctuations in the feedstock prices. China experienced the maximum changes in the Ammonia prices during this quarter. At the onset of the fourth quarter the price of Ammonia within the Chinese market was increasing significantly amidst firm demand of the material from the domestic and international fertilizer market. Demand for Chinese Ammonia from major importing country India was the key factor behind driving up the Ammonia prices as the Indian consumers were actively procuring Ammonia for the Rabi crop planting season within the country. However, by the end of November 2023, Chinese government decided to curtail its fertilizer exports in an effort to reduce the domestic Ammonia prices. The government issued CIQ export licenses and adopted a stringent stance on exports, with reports indicating containers that had already been export-cleared being removed from vessels of fertilizers, including Ammonia. Henceforth, demand from international market remained muted. The interplay of these factors prompted towards narrowed gap between demand and supply thus supporting the current price dip. As a result, the prices of Chinese Ammonia felt by a significant margin in December 2023. 

South America

The South America’s Ammonia pricing for Q4 2023 was impacted by various factors. Ammonia market unfolded bullish sentiments for the first two months of the quarter. However, as December approached Ammonia market in the Middle eastern region prevailed downward trajectory. In the initial phase of the quarter Brazil Ammonia market, the month unfolded with a decidedly bullish sentiment, driven predominantly by expensive imports from the USA market, and shortage of imported Ammonia within the domestic market. Major exporting nations particularly USA, experienced this escalation, prompting producers to adopt a cautious stance in expanding Ammonia production. Compounding the situation, a shortage of gas pipelines further constrained the availability of critical raw materials. Simultaneously, persistent bottlenecks at the Panama Canal added another layer of complexity, resulting in extended queues for ships. These disruptions not only impacted shipping schedules but also led to a subsequent rise in transportation costs, directly affecting the efficient flow of Ammonia shipments into the Brazil market. However, demand for Ammonia and other fertilizers remained restricted in the Brazil market despite the of Rice, Soyabean, Sorghum planting season as the country is suffering from prolonged drought conditions dur to El-Nino effect. Extremely hot weather conditions within the northern part of Brazil along with dry conditions during the first half of December 2023 worsened the situation of crops within the country. Simultaneously, temperature was cooler in the southern part of the country during the first half of the month, although tickled up later in the month. The split in wet weather in southern Brazil and drier weather farther north is being largely driven by El Niño, which is expected to persist into the first part of 2024. This has weakened the buying enthusiasm of fertilizer consumers in the wake of potential threat to the crops. 

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Europe

The European Ammonia market in the fourth quarter of 2023 was characterized by a bullish trend for the first two months and declined lately. Yara's temporary halt in Ammonia production contributed to the complexity of the supply dynamics, potentially causing a surge in spot demand and exacerbating the existing shortage in the European market. This shortage led to increased prices for Ammonia in the region. Further, demand for Ammonia remained firm from the international market during this period. After Chinese Government halted its fertilizer exports Asian consumers were active in the western market. However, as December approached demand from Asian market declined as the peak planting season has passed. Further, adverse weather conditions within the region along with heavy rainfall posed to be a potential threat for the crops. This has further dampened the buying enthusiasm of Ammonia consumers for Spring 2024. Additionally, trade uncertainties amidst rebel attacks in the Red Sea had caused the traders to opt for alternative trade route. In an effort to avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean. This has created a multiple-front storm for global trade, leading to a surge in European port inventories. The interplay of these factors prompted towards narrowed gap between demand and supply.  

MEA

The MEA region's Ammonia pricing for Q4 2023 was impacted by various factors. Ammonia market unfolded bullish sentiments for the first two months of the quarter. However, as December approached Ammonia market in the Middle eastern region prevailed downward trajectory. The price increase in the initial phase of the quarter was driven by shortage of supplies within the market. One of the major Ammonia producers reduced its production rate causing a shortage of supply. Further, during this period the international demand for Ammonia rose, especially after China continued to curtail its fertilizer exports, leading to an upward trend. Further, during November 2023 the Middle Eastern market faced challenges due to factory device failures, partial sales stoppages, and a constrained supply. However, as December approached demand from Asian market declined as the peak planting season has passed. Further, demand from European market also remained restricted during this period amidst adverse weather conditions within the region along with heavy rainfall posed to be a potential threat for the crops. Additionally, trade uncertainties amidst rebel attacks in the Red Sea had caused the traders to opt for alternative trade route. In an effort to avoid strikes by Iran-backed Houthi militants based in Yemen, carriers have already diverted trade over the past several weeks away from the crucial Middle East trade route, which, along with the Suez Canal, connects the Mediterranean Sea to the Indian Ocean. This has created a multiple-front storm for global trade, leading to a surge in port inventories. The interplay of these factors prompted towards narrowed gap between demand and supply.  

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