Domestic liquid ammonia continued to fall in May, with a slightly slower decline than last month. According to the commodity market analysis system of SunSirs, the price of liquid ammonia in Shandong fell by 5.88% in May. As of the end of the month, the mainstream price of liquid ammonia in Shandong was 2200-2350 RMB/ton.

Both domestic and foreign sources are high, and the supply pressure continues to increase

From the supply side, the supply and demand structure continues to be in excess. In May, the operating rate continued to increase. Previously, the maintenance enterprises resumed work one after another, and the amount of ammonia conversion increased. The inventory pressure of enterprises is high. In order to reduce the pressure, the factory price continues to decline. In addition, the import volume has increased compared with April, and the low-priced foreign sources have impacted the domestic market, and the supply is in excess.

In May, Shandong large factories repeatedly lowered the ex-factory price of liquid ammonia, ranging from 200-300 RMB/ton. From the demand side, in the traditional off-season, downstream products such as urea and compound fertilizers are not supported enough, and industrial demand remains rigid with little fluctuation. The weakness of the downstream has further aggravated the contradiction between supply and demand.

The industry chain cools down, and the upstream and downstream are mainly weak.

From the liquid ammonia industry chain diagram, the upstream and downstream environment of liquid ammonia is weak, and the upstream natural gas continues to be weak, with a monthly decline of 4.26%. In particular, the downstream sector is still generally cold, with more declines than increases. Formic acid has the largest decline, at 21.05%, and urea is still tepid. This is mainly reflected in the weak downstream demand and the agricultural off-season. At present, the increase in compound fertilizer production is not as expected by the market. The terminal production in the industrial demand field also shows a downward trend. The market is generally dominated by rigid demand, and the demand side restricts the ammonia market from getting out of the downturn.

From the perspective of urea, the urea market is sluggish. According to SunSirs, urea rebounded slightly in May, with an increase of 0.91%. The rebound in urea prices is mainly based on the increase in the amount of ammonia conversion by enterprises, which has exacerbated the contradiction of excess liquid ammonia. There is no obvious increase in downstream purchases, and the market performance is calm.

Market Forecast:

Analysts from SunSirs believe that from the supply side, the market supply and demand pressure will not decrease next month, and the impact will be weakened due to the opening and closing of devices. The mentality of enterprises to support prices may be reflected, and the room for decline in the later period may be compressed. In addition, the output of urea enterprises may increase in the later period, and the amount of liquid ammonia may increase. The supply and demand pressure in June should not be underestimated.

From the demand side, in the short term, demand remains stable, and the later period is expected to be weak. On the one hand, it is the off-season for agricultural use, and the trading is light. In addition, industrial demand remains mainly rigid demand. Overall, the downstream of liquid ammonia may continue to drag down its price recovery in the later period.

Taking all factors into consideration, the price of liquid ammonia will hover at a low level in the short term. Under the game of supply and demand in the later period, the ammonia market may enter a volatile range, and the price fluctuation range will be further narrowed. In the later period, attention should be paid to the news of the start of work of the manufacturer's device.

If you have any enquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.