Ammonia prices in India fall below prewar levels on weak demand

The price of ammonia delivered to India has slipped below the levels seen immediately before the outbreak of the war in the Middle East.

Platts, part of S&P Global Energy, assessed ammonia delivered to the West Coast of India at $465/mt CFR and the East Coast at $455/mt CFR Aug. 20.

Indian ammonia prices peaked at $885/mt CFR to each coast in April, but were at $485/mt CFR East Coast and $495/mt CFR West Coast on Feb. 27, the day before the US launched strikes on Iran.

The price collapse is due to limited import demand, as Indian buyers struggle with sulfur scarcity, limiting their production of diammonium phosphate fertilizers.

"It is not about the sulfur prices now, now is about the sulfur availability — where are they going to source sulfur?" an ammonia trader said.

An Indian buyer said: "Demand is expected to improve from September onward as the India government has given a subsidy for sulfur plus efforts going on to secure sulfur."

A phosphate producer said sulfur prices remained at elevated levels, while rising crop prices over the last two weeks could weigh on fertilizer affordability, adding that continued sulfur tightness had left the market with expectations of a rise in DAP prices.

A Switzerland-based trader said global sulfur markets were constrained by the inability to move cargoes through the Strait of Hormuz, with operators struggling to secure and locate vessels for transit, rather than a lack of product.

"The situation is bad and the outlook is bad. The problem in the Middle East is not going away," the Swiss-based trader added.