Price trend

The domestic liquid ammonia market rose again after the consolidation in late November. According to the monitoring of SunSirs, as of December 7, the liquid ammonia in Shandong had increased by 4.26% in December, and the market mainstream quotation reached 4,600-4,850 RMB/ton on December 8.

Analysis review

From the comparison chart of the liquid ammonia industry chain, the cost side has brought a strong driving force for the rise of liquid ammonia. The rise of liquefied natural gas in the upstream of gas head ammonia enterprises was strong, with an increase of 76.78% since December. The quotation of ammonia enterprises in Southwest China has generally risen above 5,000 RMB/ton. Most downstream products were weak, and the high price of liquid ammonia brought pressure to the downstream. It also showed that this round of liquid ammonia rise deviated from the demand side, and the main driving force came from cost and supply.

On the supply side, since December, the supply of liquid ammonia has been significantly tightened. In view of the epidemic situation, the production transformation and shutdown of ammonia enterprises were relatively concentrated. In addition to the devices that were still in the maintenance period before, the devices such as Wanhua, Shenyuan, Yaxin and others had failed at the same time. In addition, the urea orders previously signed by some co production enterprises were still being implemented, mainly focusing on urea production, which further aggravated the shortage of liquid ammonia supply.

On the demand side, the performance was weak. Urea has reached a high level, which has fallen back recently. According to the monitoring of SunSirs, the decline rate has been 0.43% since December. On the one hand, after the sharp rise in November, the market was weak to rise. More importantly, there were few new orders recently, and most of them just maintained in needed. In addition, due to the impact of winter storage and the boost of exports, urea has not loosened significantly, and there was still support for the long term.

Market outlook

The liquid ammonia analysts of SunSirs believe that the supply of ammonia is in short supply recently, and the benefits are gradually exhausted. With the recovery of faulty devices, the amount of ammonia will increase in the later period. Moreover, the recent market surge has led to the resistance of downstream users. Although agricultural demand support is still there, industrial demand is still weak. The supply and demand pattern may change in the later period, and the market may shift to loose supply. The ammonia market may be under pressure, so as to avoid the risk of falling back from high prices.

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