Myanmar (Burma) is on track to import more ammonium sulphate (amsul) in 2023 because of its increased use for agricultural fertilizer, as well as a raw material for rare earths mining.
Myanmar typically buys amsul from China, with its Chinese imports expected to continue to increase in the coming year. China's amsul exports to Myanmar during January-February totalled 303,400t, up sharply from 29,000t in the previous year, according to the latest GTT data.
With amsul prices on a downwards trend since October 2021, its increased affordability is likely to have prompted Myanmar's fertilizer importers to buy more amsul in the first quarter of this year. This was a timely replacement for urea purchases from China, which were higher priced and in tighter supply.
But the main driving force for Myanmar's large sharp increase in amsul imports is attributed to its use in Myanmar's rare earths mining industry. Amsul is used as a raw material in the rare earths mining industry, which is closely tied to the global electric vehicle (EV) sector. With the global EV industry expected to continue to evolve in the coming years, it may continue to accelerate the demand of rare earth ore supplies obtained from mining. This might boost production demand in Myanmar's rare earths sector as well, heightening appetite for amsul.
Rare earth importers usually use steel-grade amsul in the mining process, as caprolactam-grade amsul is of better quality for agricultural use and usually priced at a premium. But steel-grade amsul was priced more competitively in this year's first quarter because of China's domestic demand for steel-grade amsul. Caprolactam-grade amsul faced weaker export demand and was deemed more affordable to buyers, which encouraged Myanmar importers to source the caprolactam-grade amsul instead.
Myanmar's demand for amsul has been slightly weaker in recent weeks because of the imminent monsoon season that hinders rare earths mining activity. But demand from this sector is likely to eventually pick up for the rest of this year to support amsul imports.
