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U.S. ammonia prices rise in response to higher international natural gas prices

The U.S. price of ammonia, the primary source of nitrogen fertilizer, has risen by a factor of six in the past two years, and most of these increases have occurred since March 2021. Ammonia prices generally follow natural gas prices because ammonia is produced primarily from natural gas. U.S. ammonia prices closely follow international ammonia prices because approximately 14% of total U.S. ammonia consumption is met by imports. Generally, prices of commodity chemicals (ammonia) closely correlate with prices of feedstock (natural gas). Because the global ammonia market is highly interconnected, the U.S. price of ammonia closely follows international ammonia prices rather than only U.S. natural gas prices. Compared with natural gas prices in the United States, which have remained relatively steady, international natural gas prices have risen rapidly over the past 12 months, pulling ammonia prices higher.

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