Increasing demand for ammonium nitrate in Russia
In the second half of September the listings for ammonium nitrate (FOB Black Sea) fell by $11.50, to $170-175 per 1 ton. The 900 thousand tons of urea purchase transaction by the Indian company MMTC through the tender process which ended in mid-September did not support nitrogen fertilizer prices, contrary to the expectations among market participants. The trend for this type of fertilizers remains negative.
At present, it is possible to judge mainly by the Brazilian market whether prices will rise or not. The urea price in Brazil went up slightly above $280 per 1 ton (CFR). According to traders, this counts in favor of stable prices in the market as a whole. The peak season begins in the country, and the prices are going to rise, but the situation is changing slowly.
Another factor that can revive the market in the medium term may be another Indian tender, which is scheduled for mid-October. It is expected that the carbamide volume purchased at the auction will be 0.8-1.5 million tons.
In the Russian market the price of ammonium nitrate continued to fall in the second half of September. This contributed to the increased demand for the product from both traders and large agricultural holdings. Volumes of purchased batches ranged from 8 to 20 thousand tons, according to the information received from market participants. In the regions of the Central Black Earth Region ammonium nitrate has fallen in price by 0.7-1 thousand rubles ($10-15) down to 13-13.3 thousand rubles ($200-205) for 1 ton (CPT) since the beginning of September.
In October – the first half of November, market participants expect demand for ammonium nitrate to increase. Most buyers are set to further reduction of the product price in the domestic market due to decrease in prices for nitrogen products in the world market.