Price trend

Last week, the domestic liquid ammonia market experienced a downturn, with sluggish performance.  According to the commodity price analysis system of SunSirs, the price of liquid ammonia in Shandong province fell by 2.39% last week (January 19-23). The main reasons were ample ammonia supply, the impact of rain and snow in northern China on market circulation, and increased supply due to the resumption of operations at some ammonia plants, coupled with weak market demand. As of January 23, the mainstream price of liquid ammonia in Shandong province was 2,250-2,400 RMB/ton.

Market analysis

From a supply perspective, supply continued to increase last week compared to the previous week. Liquid ammonia production remained stable in Shandong and Hebei regions, while some facilities in Anhui and Jiangsu resumed operations, leading to an increase in ammonia supply. In addition, transportation was restricted in parts of Shandong, Northwest China, and Inner Mongolia due to snowy weather, resulting in inventory accumulation at enterprises. From the beginning to the end of the week, some companies in northern China lowered their prices, with major manufacturers in Shandong generally adjusting prices by around 100 RMB/ton. The market showed an oversupply situation, and companies still have expectations of resuming production later, suggesting that supply may continue to increase in the future.

From the demand side, downstream demand remained weak. The operating rate of compound fertilizer plants remained low, and some downstream phosphate fertilizer companies were experiencing reduced operating rates due to environmental regulations, resulting in relatively weak demand. Urea shipments had contracted recently, and prices were mainly trending downwards. According to commodity analysis systems, the weekly decline in urea prices was 1.27%. Furthermore, domestic industrial demand was 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, mainly due to the anticipated resumption of production at some facilities, which poses a supply risk. However, agricultural demand may increase, and operating rates for downstream products such as ammonium biphosphate and diammonium phosphate were showing signs of recovery. The intensified interplay between supply and demand in the later period suggests that the ammonia market is unlikely to improve, and is expected to mainly fluctuate within a range.

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