How does ammonium nitrate pricing respond to supply-demand shifts in China's civil explosives sector?

How does ammonium nitrate pricing respond to supply-demand shifts in China's civil explosives sector?
Ammonium nitrate demand is heavily tied to civil explosives, which consume about 70% of output, with the rest going to fertilizers. China's capacity stood near 8.67 million tons in 2021, but actual production was only 3.67 million tons, indicating severe overcapacity. Despite this, prices surged in late 2021, averaging 3,283 yuan per ton in Q4, driven by strict government controls, higher industry entry barriers, and a policy push toward direct sales and zero inventory. Producers now operate on a make-to-order basis, reducing stockpiles and amplifying price swings when downstream mining and infrastructure demand picks up. Regional supply constraints also matter, as ammonium nitrate's safe transport radius is roughly 500 kilometers, limiting cross-regional competition and creating localized shortages.