Daily Chemical Reactions | Global Agriculture

A Weaker Agriculture Economy In 2024 Favors Keeping Ammonia Market Growth In Check
January 17, 2024
Commodities Mentioned:
Ammonia, Ammonia, Nitrogen, Nickel, Lithium, Styrene, Ethylene, PET, Nylon, Polycarbonate, Copper, Oil, Natural Gas, Hydrogen, Ethanol, Carbon
Companies Mentioned:
CF Industries, Nutrien, LSB Industries, Grupa Azoty, Unigel, Yara, FMC, Corteva, BASF, Albemarle, Formosa, AmSty, Eneos, LyondellBasell, BHP, Air Products, Ascend, Pidilite Industries, Pilbara Minerals, Versalis, The Andersons, Shell, Phillips 66, Occidental, TotalEnergies, Trafigura, ExxonMobil, Reliance, Chesapeake, Southwestern, Aramco, Venture Global, Enron, Talos, Qatar, ADM, Bunge, Petro, 3Tentos, Pertamina

Monthly Report – Global Agriculture

A Weaker Agriculture Economy In 2024 Favors Keeping Ammonia Market Growth In Check

Key Findings

  • General Thoughts: Our first global agriculture monthly report targets crop market and input trends in 2023 and their likely development in 2024, with a significant focus on ammonia fertilizer given its 2H23 margin strength.
  • Supply Chain/Commodities: Global ammonia market demand over-enthusiasm risks jolting supply in a market where economics do not support it. Economic uncertainties and several challenges may lessen the risk in 2024.
  • Energy/Upstream: North American ammonia producers hold a sizable cost advantage relative to Europe and Asia. However, recent Ex-US natural gas price weakness has curbed this advantage, favoring more global supply.
  • Sustainability/Energy Transition: We highlight our global hydrogen cost work, the challenges of cutting CO2 from fertilizer, and the complex traceability challenges of mapping low-carbon farm output to downstream consumers.
  • Downstream/Other Chemicals: We discuss recent weakness in crop prices that also reflect an elevated soybean-to-corn price ratio and global food inflation trends yet to subside for consumers in a few significant markets.

Exhibit 1: In 2023, US Fertilizer equities outperformed the S&P Fertilizer & Agricultural Chemical Index, which was also beaten by the broader market (Ex. 2). Falling crop prices and Ex-US energy costs are an early year headwind in 2024.

Source: Bloomberg, C-MACC Analysis, January 2024

See PDF below for all charts, tables and diagrams

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