Price trend

Last week (September 22-28), domestic liquid ammonia prices continued to rise. According to the SunSirs commodity market analysis system, prices in Shandong Province saw a 1.16% weekly increase. This was primarily due to the slow production increases in some regions amidst stable downstream demand, which had slightly eased supply pressure. As of September 28, the mainstream price of liquid ammonia in Shandong Province was between 2,250 and 2,400 RMB/ton.

Analysis review

On the supply side, supply remained reasonably balanced last week. Previously, due to maintenance at some facilities, production schedules in Shandong, Henan, and Northwest China were slightly reduced. While some companies resumed work last week, overall growth was slow, putting minimal pressure on market supply. Some companies adjusted prices from the beginning to mid-week, with major Shandong manufacturers generally adjusting by around 100 RMB/ton. Market supply and demand remained generally balanced, but supply increased slowly over the weekend, leading to inventory accumulation. Some companies in Shandong saw price quotes decline slightly, by as little as 50 RMB/ton. With expectations of resumption of work later in the week, supply may continue to increase.

On the demand side, downstream demand was tepid, with compound fertilizer production rates remaining low. Urea shipments have recently increased, leading to a slight mid-week price increase. However, the market generally cooled after the price increase, and prices generally fell back to their early-week levels as the weekend approached, primarily due to insufficient demand. According to the commodity analysis system, urea prices fell 1.44% last week. Furthermore, domestic industrial demand was weak, while agricultural demand was mainly based on on-demand purchases and sporadic restocking. Demand improved little, and a wait-and-see attitude remained dominant in the market.

Market outlook

Analysts of SunSirs believe that liquid ammonia continued its upward trend last week mainly due to the continued positive factors on the supply side. There is an expectation that the maintenance equipment will resume work in the near future. Near the weekend, some companies had shown inventory pressure, and ammonia prices had fallen slightly. Supply pressure may gradually increase in the later period. In addition, there are not many positive factors on the demand side, and it is expected that the ammonia market may still have room for downward adjustment.

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