Ammonium Nitrate is a chemical compound that has a myriad of industrial applications. It was the primary solid nitrogen (N) fertiliser that was produced on a mass scale. In the following blog, we will dive into the commodity’s market dynamics.
Ammonium Nitrate Defined
Ammonium nitrate (NH4NO3) on a commercial scale is available as a colourless crystalline solid. It is nitric acid’s ammonium salt. It is white, water-soluble and has a melting point of 170°C. It is not quickly burned but can do so with the help of an explosive agent. Upon burning, it leads to the production of toxic oxides of nitrogen. Moreover, it finds primary application in fertilisers, explosives, as an oxidising agent, as well as a nutrient for producing yeast and antibiotics.
Applications of the Product Across Various Verticals
Ammonium nitrate finds primary application as a fertiliser in the agricultural sector. It is also used to manufacture explosives, making it ideal for use in end-user industries, including mining, construction, defence, and quarrying. Solid ammonium nitrate can be made into grains, crystals or granules.
Hot ammonium nitrate liquor finds extensive use in the mining sector. Furthermore, electronics-grade ammonium nitrate is employed in the electronics industry. In the gas-phase chemical deposition stage, it is used to make LCDs, semiconductors, and thin-film oxides for products like smartphones, cars, computers, robots, space rockets and health devices. Also, medical grade ammonium nitrate plays a vital role in the healthcare industry as it is used to manufacture anaesthetics that are used in surgery and dentistry as well as a propellant for drugs with aerosol packaging. Other applications of the product are food additives and cold packs.
The Production of Ammonium Nitrate Can Be Carried Out Via Two Methods:
- Production of Ammonium Nitrate from Metal Nitrates– The production of ammonium nitrate is done using a standard metathesis reaction. In the method, ammonium salts are made to react with metal nitrates which leads to the removal and formation of Ammonium Nitrate salt.
- Production of Ammonium Nitrate from Ammonia– The Production of Ammonium Nitrate is carried out via the reaction of nitric acid on anhydrous ammonia, which leads to the formation of an aqueous ammonium nitrate solution. Following the formation of the solution, the extra water gets evaporated, and later, ammonium nitrate is turned into tiny beads that find industrial applications.
Key Players in the Industry
The following are the key market players in the industry that contribute to the market with several capacity expansions, plant turnarounds, and recent developments, as well as mergers and acquisitions:
- CF Fertilisers UK
- Croda International Plc
- Yara International ASA
- Orica Limited
- Maxamcorp Holding, S.L.
- Sasol Limited
Price Insights for Ammonium Nitrate
Prices of Ammonium Nitrate stayed steady to strong in the North American region, driven by adequate supply and frail purchasing intent. The plunging values of feedstock Ammonia and Crude Oil conveyed adverse cost pressure in the regional market’s fundamentals. Production costs stayed optimal in spite of the American market’s weak consumption rates. In the U.S., supply chains have persisted as a reason for manufacturers’ concerns in the past few quarters. Logistic restraints and port blockages on the East Coast and U.S. Gulf have aggravated the supply dynamics. The disruption in demand from the downstream agriculture sectors amid Hurricane has led to a slump in demand fundamentals. It has influenced the trading sentiments of the regional market during Q3 of 2022.
The regional Ammonium Nitrate price trend in the Asia Pacific region dipped during the third quarter. The leading cause for the low price was predominantly bearish demand. The feedstock material, liquid Ammonia price, has recently varied in the market, whereas the Nitric Acid price remained on the lower side. The demand for Ammonium Nitrate was negatively impacted by the cheap raw material prices, whilst the downstream demand from the explosives sector’s sales halted. The market’s condition stayed sluggish, significantly in the APAC region. Abundant supplies are recorded in the domestic market as operational costs are lower in the regional market owing to elevated energy costs.
In Europe, the prices of Ammonium Nitrate soared with restricted supplies and undetermined geopolitical climatic conditions. The supply condition stayed under immense pressure since the industrial operating costs were average. Since the majority of materials were being exported to countries in Asia, which resulted in restricted availability of the material in the regional market, the demands from downstream mining and explosives sectors was reasonable owing to their moderate performance in the regional market. The supply restrictions and fears regarding inflation helped in aiding the surge in prices of ammonium nitrate reaching record or multi-year highs. The surging prices of ammonium nitrate were propelled by the crunch in Russian gas supplies as well as advanced E.U. demand.
ammonium nitrate is a crucial chemical compound that finds application in the agricultural sector as well as other commercial uses. Owing to its several vital uses, its procurement is essential, which brings the need for the guidance of a team of experts such as Procurement Resource, whose industry experts will guide you in all your business needs related to procuring the commodity.