In the past few years, the price of ammonia has been riding a rollercoaster, with the cost impacted by disruptions arising from the pandemic, from the surge in energy prices after Russia’s invasion of Ukraine, and plenty of other factors.
At its lowest in established markets, it was trading at 25 cents a kilo in the US in 2020, for example, but it has also gone has high as $1.20 a kilo in some markets in 2022, as high energy prices bit .
This fluctuating price of NH3 is influenced by factors linked to production costs, supply and demand dynamics, and external geopolitical or regulatory factors. Chief among these, it should be said, is natural gas prices, with ammonia primarily produced through the Haber-Bosch process, which requires hydrogen, typically sourced from natural gas. Natural gas in fact accounts for up to 90% of ammonia production costs where that’s part of production, so fluctuations in gas prices have a major impact.
But there are other, greener ways of making ammonia, such as electrolysis-based hydrogen. The cost of this production method is more today and partly depends on electricity prices, of course, and these vary by region and energy mix.
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