Price trend

This week (7.14-18), the liquid ammonia market in Shandong was sluggish, with prices continuing the downward trend from last week. According to the Commodity Market Analysis System of SunSirs, the main production area of Shandong experienced a weekly decline of 0.58%.

Analysis review

The main reason was that the supply pressure was increasing and the market inventory was too high. The maintenance equipment was partially running, and the supply side was showing loose performance. In addition, many manufacturers increased the amount of ammonia conversion, and the accumulation of liquid ammonia continued to put pressure on the manufacturers. From the beginning of the week to the middle of the week, the prices of manufacturers gradually loosened. As the weekend approached, the prices of manufacturers gradually stabilized. As of Friday, mainstream large factories in Shandong generally lowered their prices by around 50 RMB/ton. Distributors mainly quoted at low prices for shipments. And downstream procurement enthusiasm was not high, agricultural demand was still in the off-season, industrial demand remained rigid, and the overall demand side was bearish. As of July 18th, the mainstream quotation in Shandong region was 2,300-2,400 RMB/ton.

Future outlook:

Recently, the operating rate of downstream compound fertilizers for liquid ammonia has decreased, which has lowered the demand for liquid ammonia. Agricultural demand and industrial demand mainly followed up, with sufficient supply, but the mid-term supply pressure maybe partially alleviated. On the one hand, in the main production areas of the north, as prices hovered at low levels or supply was tightened, there was an increase in enterprise inspections and price hikes, and it was not ruled out that manufacturers would reduce production and adjust supply. From the demand side, downstream procurement may continue to be sluggish, maintaining reasonable procurement demand. There is not much room for order growth in the later stage, and industrial demand is followed up on demand. Taking all factors into consideration, liquid ammonia may still perform weakly next week, with prices mainly hovering at low levels.

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