Price trend:

In November, domestic liquid ammonia prices rose sharply. According to the SunSirs' commodity market analysis system, liquid ammonia prices in Shandong province increased by 12.93% that month. The main reason was tight supply due to stable downstream demand and reduced operating rates caused by maintenance shutdowns at many plants. By the end of the month, the mainstream price of liquid ammonia in Shandong was 2,450-2,650 RMB/ton.

Market Analysis

From a supply perspective, in the first ten days of the month, production volume decreased due to environmental inspections affecting some products in northern China, coupled with temporary equipment malfunctions and maintenance, resulting in a decrease in ammonia supply in the north. Supply pressure was not significant in Shandong, Hebei, Anhui, and the two Hubei provinces, and prices rose significantly. Companies primarily increased their quoted prices repeatedly. In the middle of the month, the market entered a period of volatile adjustment, and prices slightly declined as the environmental inspections ended. In the last ten days of the month, the market returned to a balance of supply and demand, with some regional stabilization. Prices in the Shandong region slightly increased, but the increase was not significant. 

From the demand side, downstream demand improved significantly, with better agricultural demand and increased exports. Specifically, the operating rate of compound fertilizer plants haD increased, leading to a significant rise in urea demand. Urea prices fluctuated upwards throughout November, with an increase of 3.5%. Furthermore, domestic industrial demand remained strong, and coupled with the depletion of ammonia stocks due to earlier consumption by manufacturers, producers were more inclined to maintain prices, thus supporting ammonia prices.

Market Forecast:

According to analysts at SunSirs, the rise in liquid ammonia prices this month was primarily driven by favorable factors on the supply side. Although demand improved, the increase was not significant.  Looking ahead to December, the expected resumption of operations at maintenance-affected plants in northern China may alleviate supply shortages to some extent, offsetting the positive impact of increased production of compound fertilizers. Considering all factors, it is expected that the sharp rise in liquid ammonia prices will cool down, and prices will return to a range-bound fluctuation.

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