Price trend

Last week (6.23-27), domestic liquid ammonia rose, according to the Commodity Market Analysis System of SunSirs, the weekly increase of liquid ammonia in Shandong region was 2.60%. The main reason was that, against the backdrop of stable downstream demand, some equipment maintenance had not yet resumed, and the supply pressure slightly eased. As of June 27th, the mainstream price of liquid ammonia in Shandong region was 2,300-2,450 RMB/ton.

Analysis review

From a supply perspective, last week the supply remained relatively stable, with some devices still undergoing maintenance and a decrease in supply. In addition, there was not much supply pressure in Hebei, Anhui, and the two Hu regions. At the beginning of the week, the weakness continued from last week, but from mid week to the weekend, the main trend was the repeated increase in enterprise quotations. According to estimates, the increase in prices by manufacturers last week was around 100 RMB/ton. The market showed a basic balance between supply and demand.

From the demand side, there was not much improvement in downstream demand, with the operating rate of compound fertilizers still at a low level. However, the impact of recent export policies on urea  gradually weakened, and market trading volume had slightly rebounded. Last week, urea prices rebounded, which also had a certain driving effect on liquid ammonia. According to the commodity analysis system, the four-day increase in urea prices from the 24th to the 27th. But domestic industrial demand was soft, agricultural demand was purchased on demand, sporadic replenishment was the main focus, demand improvement was not significant, and market sentiment was mainly wait-and-see.

Market outlook

SunSirs’ analysts believe that the slight increase in liquid ammonia prices last week was mainly due to favorable conditions on the supply side, and there was still no improvement on the demand side. However, with the expectation of some maintenance facilities resuming work next week, supply is under pressure, and there is a risk of a correction in liquid ammonia prices.

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