Price trend

In June, the domestic liquid ammonia market mainly fluctuated and rose, breaking out of a trend of first rising and then falling. According to the Commodity Market Analysis System of SunSirs, liquid ammonia recorded a monthly increase of 3.34%. At the end of the month, the mainstream quotation in Shandong region was between 2,300-2,450 RMB/ton.

Analysis review

In the first ten days, the liquid ammonia market began to gain momentum, and the overall operating rate of domestic manufacturers significantly declined, especially in the main production areas in the north, where the amount of ammonia released by enterprises was generally low. In addition, Fujian, Jiangsu and Zhejiang regions, Hebei and Shanxi were experiencing supply shortages due to equipment maintenance or temporary malfunctions. The local demand had slightly increased, and the trading atmosphere had improved. The ex factory price of liquid ammonia naturally increased several times. At the beginning of the month, the manufacturer raised the price by more than 100 RMB/ton in the first week. The market performance was in short supply.

In the middle of the month, there was a reversal in the liquid ammonia market, with a sharp downturn in the market and a widespread decline in various markets. In addition, the northwest and Inner Mongolia had also experienced declines along with the downturns in Shanxi, Shaanxi, and other regions. The main reason for the increase in supply pressure was that the operating rate in many major production areas in the north had rebounded, and malfunctioning enterprises resumed work one after another. There were more ammonia enterprises converting to liquid ammonia, and the amount of ammonia had increased unprecedentedly. In addition, most of the facilities in Central China, Northwest China, and other regions had been operating steadily, and the increase in supply had led to a general accumulation of inventory among manufacturers. Manufacturers had generally lowered prices to clear inventory and reduced pressure. Most prices fell to the level before the market started. As the end of the month approached, liquid ammonia maintained a narrow adjustment pattern, with slightly loose supply performance and weak market conditions.

Market outlook

SunSirs’ analysts believe that from a supply side perspective, the market operating rate remained at a medium high level. However, many manufacturers have maintenance plans in July, with an increase in Hualu's own use and a decrease in exports. Runjin, Mingshengda, Henan Jinkai and other companies suspended maintenance and sales, and it is expected that the supply of liquid ammonia will show a downward trend in July.

From the demand side, agricultural demand will remain at the off-season level, and the demand for compound fertilizers will continue to decline. Phosphate fertilizers will show a moderate trend, and overall, the demand for liquid ammonia may remain sluggish.

Taking all factors into consideration, the future supply and demand of liquid ammonia will show a certain contraction trend in the near future, and prices will fluctuate with the intensification of the supply-demand game. Overall, the decrease in supply will be higher than the decrease in demand, and it is expected that the price of liquid ammonia will fluctuate to be stronger.

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