According to China Chemical News, by the end of October, the mainstream transaction price for ammonium chloride in China stood at 360–390 yuan per ton, marking a cumulative decline of approximately 15% over two months and hitting a new low for the year. Entering November, the market has seen sustained positive trading activity and a price recovery trend, supported by favorable factors including increased production at downstream compound fertilizer enterprises, reduced output at combined soda ash and ammonia plants, and the gradual commencement of winter stockpiling.

This year, the ammonium chloride market underwent two rounds of deep adjustments from April to June and August to October. The downward pressure in the latter half of the year stemmed primarily from phased contraction in demand and market structural adjustments. The deep price correction highlighted ammonium chloride's cost-effectiveness. For instance, compared to ammonium sulfate, ammonium chloride offers higher nitrogen content at only one-third of the price, gaining attention from compound fertilizer producers. This positions it for a potential rebound after bottoming out.

Upstream Production Activity Increases

Statistics indicate that China's compound fertilizer capacity utilization rate reached 33.26% in November, a 5.08% month-on-month increase. Beyond agricultural demand, industrial applications have emerged as a new growth engine for ammonium chloride. Consumption is projected to reach 2.8 million tons by 2025, expanding into high-end sectors such as battery electrolytes, metal welding additives, pharmaceutical intermediates, and rare earth separation.

Compound fertilizers remain the largest consumer of ammonium chloride, accounting for 87% of total demand. In the first ten months of this year, the production rate trend of compound fertilizer enterprises largely mirrored that of the previous two years, contributing significantly to the continuous decline in ammonium chloride prices. Starting in November, compound fertilizer plants increased production capacity utilization and intensified ammonium chloride procurement. After completing earlier backlog orders, some enterprises raised prices by 30–50 yuan, with many suspending quotations by late November. Consequently, price hikes in late November were gradually accepted by downstream buyers. Composite fertilizer plant operating rates are expected to rise further in December. Increased production will inevitably lead to higher raw material procurement, providing favorable support for the ammonium chloride market.

Combined Soda Ash Production Cutbacks

From a production process perspective, ammonium chloride produced as a byproduct of the combined soda ash process accounts for over 85% of China's total output. In November, some major enterprises reduced production capacity due to plant maintenance or market adjustments, leading to a month-on-month decline in the industry's overall operating rate and a corresponding decrease in monthly output. As of November 27, domestic ammonium chloride output for the month stood at 1.2964 million tons, down 166,800 tons month-on-month.

Regarding market supply, some previously idled plants remain offline, while others operate at reduced capacity, suggesting overall supply may continue to tighten. Meanwhile, enterprises hold substantial backlogs of pre-delivery orders and face no inventory pressure. A short-term supply gap may emerge, with tight supply and rising prices bolstering ammonium chloride producers' confidence to hold back sales and test price increases.

Winter Stockpiling Commences Gradually

Recent sharp increases in phosphate and potash fertilizer prices have driven up compound fertilizer costs. Many compound fertilizer producers are primarily focused on depleting existing phosphate and potash inventories, limiting restocking at elevated prices. Ammonium chloride, however, has become more favored by compound fertilizer producers due to its lower price and reduced storage risks. Given fixed storage capacities, replenishing inventories with lower-priced ammonium chloride is undoubtedly a more advantageous choice as phosphate and potash inventories decline.

With winter stockpiling underway, ammonium chloride producers had already released substantial inventories earlier, enabling smooth implementation of price hikes starting in late November. By late November, traders showed increased participation, shifting the negotiation focus upward in the ammonium chloride market.

In the short term, against a backdrop of marginally improving supply-demand fundamentals, the ammonium chloride market may enter a phase of bottoming out and recovery. However, price trends will remain subject to the combined influence of upstream energy cost fluctuations and the macro policy environment.

Long-term, the healthy development of the ammonium chloride industry hinges on continuously advancing product structure upgrades and expanding its application share in high-value industrial sectors. This will enhance the industry's overall risk resilience and sustainable profitability.

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