Price trend

After the holiday, domestic liquid ammonia prices have mostly retreated. Last week (October 13-17), according to the SunSirs Commodity Market Analysis System, liquid ammonia prices in Shandong Province fell by 0.45%. This was primarily due to the fact that, despite stable ammonia supply, rainy weather in northern China had delayed agricultural demand, weakening downstream factory purchases. As of October 17, the mainstream price of liquid ammonia in Shandong Province was between 2,180 and 2,250 RMB/ton.

Analysis review

On the supply side, last week's supply remained reasonably balanced. Liquid ammonia production in Shandong and Hebei remained unchanged, and some companies in Henan increased their conversion to ammonia. However, short-term maintenance in Northwest China, Inner Mongolia, and Ningxia resulted in reduced production, resulting in a tight overall supply, with slight regional divergence. From the beginning to mid-week, some companies in Shandong Province lowered prices, but the magnitude was modest. Major manufacturers in Shandong generally adjusted prices between 50 and 100 RMB/ton, indicating a generally balanced supply and demand market. However, with companies still anticipating a resumption of work, supply may continue to increase.

On the demand side, downstream demand was tepid, with compound fertilizer production rates remaining low and phosphate fertilizer prices continuing to decline, indicating relatively weak demand. Urea shipments had been stable recently, with prices rebounding slightly during the week, but this upward trend failed to continue as the weekend approached. According to the commodity analysis system, urea prices rose by 0.64% on a weekly basis. Furthermore, domestic industrial demand was weak, while agricultural demand was mainly on-demand and sporadic replenishment. Demand had improved little, and a wait-and-see attitude remained dominant in the market.

Market outlook

Analysts of SunSirs believe that the supply and demand pressure in the liquid ammonia market is expected to remain next week. Although the supply in some local areas has slightly declined in the short term, it is difficult to establish an upward expectation. The main reason was that as of October 17, there was no improvement in agricultural demand. In addition, next week's meeting may have a negative impact on transportation. It is expected that the ammonia market may not improve and the room for growth is very limited.

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