Price trend:

Last week, the domestic liquid ammonia market did not continue the upward trend of the previous week, with prices mainly stabilizing or falling. According to the commodity price analysis system of SunSirs, the price of liquid ammonia in Shandong province fell by 0.92% last week (December 15-19). This was mainly due to stable ammonia production, coupled with the impact of rain and snow in northern China affecting supply and distribution, as well as local environmental inspections affecting demand, and the resumption of supply in Henan province. As of December 19, the mainstream price of liquid ammonia in Shandong province was 2,400-2,600 RMB/ton.

Market Analysis

From a supply perspective, supply remained reasonably balanced last week. Liquid ammonia production in Shandong and Hebei provinces remained steady, and production resumed at companies in Henan province, leading to an increase in supply. However, transportation was restricted in areas such as Shanxi due to snowy weather, resulting in increased inventory at some companies. The market was relatively stable at the beginning of the week, but some companies in northern regions made slight price adjustments from mid-week to the weekend. Major manufacturers in Shandong generally adjusted prices by 50-100 RMB/ton. The market showed a basic balance between supply and demand, but companies are expected to resume production later, potentially leading to a continued increase in supply.

From the demand side, downstream demand remained lukewarm. The operating rate of compound fertilizer plants remained low, and some downstream phosphate fertilizer companies were experiencing continuously declining operating rates due to environmental regulations, resulting in relatively weak demand. Urea shipments were stable recently, with prices showing a slight increase during the week, but the upward trend did not continue towards the end of the week. According to the commodity analysis system, the weekly increase in urea prices was 1.46%. Furthermore, domestic industrial demand remained weak, and agricultural demand was mainly based on need-based purchasing and sporadic restocking. Overall demand improvement was limited, and a wait-and-see attitude still dominated the market.

Market Outlook

According to analysts at SunSirs, the liquid ammonia market is expected to continue facing supply and demand pressure next week. Although short-term production may slightly decrease in some regions, the market still faces supply risks due to potential transportation difficulties caused by future weather conditions. Coupled with the off-season for agricultural demand, the ammonia market is unlikely to improve and is expected to remain volatile within a range.

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