Ammonia Market Trends 2024

by Warren Seah

LSB Industries, a leading ammonia manufacturer, has reported an increase in prices recently but anticipates a moderation in the coming months. This shift follows a period of price declines in the market.

Urea and Ammonium Nitrate Prices on the Rise

The rise in urea prices can be attributed to Chinese export limitations, with urea ammonium nitrate prices also on an upward trend according to LSB Industries.

Pricing and Production Projections for 2024

  • Ammonia Pricing: Expected to stabilize further in 2024 due to heavy application by U.S. farmers in Fall 2023 and declining natural gas prices in Europe.
  • Production Volumes: Forecasting ammonia production between 780,000 tons to 800,000 tons.

Sales Estimates for the Year

  • AN and Nitric Acid Sales: Anticipated sales volumes of 560,000 tons to 580,000 tons.
  • Urea Ammonium Nitrate Sales: Projected volumes of 560,000 tons to 580,000 tons.
  • Ammonia Sales: Estimated volumes between 280,000 tons to 300,000 tons.

Industry Insights for LSB Industries

The company’s projections for production and sales volumes take into account upcoming turnarounds at the Pryor and Cherokee facilities. These adjustments differ from the previous year’s operations, highlighting a shift in strategy.

Meeting Demand Expectations

LSB Industries remains optimistic about meeting demands for ammonia-based products with a focus on efficiency and market dynamics.

Strong Demand Expected for Nitrogen Fertilizers in Coming Spring

The company foresees a surge in demand for nitrogen fertilizers during the upcoming spring planting season. Retailers and farmers are expected to find prices for ammonia and other nitrogen products particularly attractive. Furthermore, the support for fertilizer demand is reinforced by the current U.S. corn prices.

Stable Nitric Acid Demand Amid High U.S. Inflation

Despite the impact of high inflation in the U.S., demand for nitric acid remains stable. This is attributed to global producers shifting their production from international facilities to U.S. operations to capitalize on lower energy prices.

Robust Industrial and Mining Business Performance

LSB reports strong business performance in its industrial and mining segments, driven by consistent demand for industrial products supported by the resilient U.S. economy. The company mentions that demand for AN for mining applications remains steady, thanks to favorable market fundamentals for quarrying, aggregate production, and U.S. metals.

Decision to Delay El Dorado Production Expansion

The company has decided to postpone the expansion of production capacity at its El Dorado facility. After careful consideration of various factors, including current market conditions and ongoing initiatives, it was determined that delaying the El Dorado expansion would allow for more effective resource allocation to other projects while safeguarding the strength of the balance sheet.

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