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SunSirs: Liquid Ammonia Rebounded after Falling in February and There Is Still Room for Upside in March

March 05 2021 13:23:13     SunSirs (John)

In February, the liquid ammonia market rebounded after emerging from the decline. According to the monitoring of SunSirs, the overall decline of liquid ammonia was 0.20% throughout the month.

The market was in a downtrend before the Spring Festival, which was mainly affected by the lack of pre-holiday atmosphere, declining purchase willingness, and loose supply. There was an obvious imbalance between regions. Before the holiday, the supply of natural gas in the southwest region was restored, the supply of liquid ammonia was eased, and the amount of ammonia continued to increase. The price of liquid ammonia in the southwest region also continued to decline by 400-500 RMB/ton. However, some companies in Shandong, Henan and other regions were still short of normal supply in the short term, and prices in these regions were relatively resilient. The decline was only 200-300 RMB/ton.

After the Spring Festival, the market gradually recovered, long-distance transportation quickly recovered, and the liquid ammonia market ushered in the delivery period. Due to the decline in liquid ammonia inventory of most manufacturers, it also cleared the obstacles to price increases, and after the holiday, downstream demand for urea and phosphate fertilizers rebounded, and purchases increased. The prices of liquid ammonia in Shandong and Hebei also rebounded significantly.

In terms of urea, the overall trend of urea in February was positive, with a strong increase of 6.47%. The urea market continued to be affected by the rising demand for stocking in spring. Fertilizers in spring were expected to heat up, and prices continued to rise. The post-holiday market growth trend slowed down slightly, mainly due to the high price of urea, some liquid ammonia enterprises switched to urea production, the supply of urea was loose, and the price was mainly to stop rising.

As far as downstream compound fertilizers are concerned, they generally rose. According to the monitoring of SunSirs, the increase of ammonium biphosphate in February was 17.25%, and the increase of DAP was 16.27% (as shown in the figure above). In February, downstream demand rose as a whole. In agriculture, the price of ammonium phosphate was gradually increased due to the concentration of spring ploughing and stocking. In addition, demand for foreign exports increased. With all the favorable conditions, the price of ammonium phosphate was running high.

Looking at the future market, SunSirs believes that the liquid ammonia market may gradually return to stability in March, and the downstream product industry's operating rate will gradually increase, which has certain support for the liquid ammonia market outlook. Some enterprises' ammonium nitrate installations have begun to recover, and downstream purchases may be increased later. At present, the price of urea is relatively high, and the overall pressure of liquid ammonia supply is not great. With the start of the spring plowing season, the price of liquid ammonia may still have room for increase in the later period.

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