Ammonia prices will rise

It can be expect a higher ammonia prices in early 2007 due to the growing demand for corn to make ethanol. And that will ramp up ammonia prices in 2007—possibly by as much as 10% to 15% from the $5.90/kg average of the past two years to $6.80. Reason: Ethanol is being used more extensively as a gasoline octane additive. Corn is the key ingredient in making ethanol, but it one of the most fertilizer-intensive crops in the country.

Atop that, ammonia supply has tightened in recent years as several North American plants have been idled as a result of rising natural gas prices since the early 2000s. Natural gas is the fuel of choice in ammonia manufacture.