SunSirs: Large Increase in Supply Was Difficult to Support High Price, and Liquid Ammonia Fell Back from High Level

Price trend

This week (12.12-16), the domestic liquid ammonia market fell from a high level, with a strong decline. According to the monitoring of SunSirs, the drop of liquid ammonia in Shandong this week was 3.75%, the supply pressure increased significantly, and the supply and demand changed from tight to loose. The mainstream price of liquid ammonia in Shandong was 4,300-4,600 RMB/ton near the weekend.

Analysis review

From the supply side, the ammonia release in the main production areas only increased this week, and the shipments in Shandong, Hebei, Shanxi, Henan and other places were large. The main reason was that a large number of maintenance devices were returned to production. Since the beginning of this month, Fujian Wanhua and Shenyuan devices had resumed production. This week, Shanxi Yaxin and Runjin had also started to operate. In addition, due to the high price of liquid ammonia in the early stage, most joint production enterprises switched from urea to liquid ammonia, resulting in a sharp increase in ammonia volume. Under the effect of successive price reductions, manufacturers had made greater efforts to ship. In recent two weeks, the ammonia volume remained high, and the price was mainly suppressed by loose supply.

On the demand side, the trend of urea and liquid ammonia deviated. According to the monitoring, the urea price rose by 1.71% this week. The upward trend of urea was mainly affected by the positive news. It is said that the export policy is expected to be relaxed, and the futures market also rose. The originally deadlocked spot also got a boost.

From the perspective of the industrial chain, the downstream was commendable. Compound fertilizer had rigid support, and the price rose, especially the weekly increase of 4.09% for ammonium chloride and 1.28% for DAP

Market outlook

Analysts from SunSirs believe that the decline of liquid ammonia this week was mainly caused by a supply run, with manufacturers' supply of goods being loose and prices falling. The game between supply and demand will continue in the later period. The demand for phosphate fertilizer is still supported, but the demand at industrial end is weak, and the operating rate of vinyl cyanide is low. It is expected that liquid ammonia still has room for inertial downward trend in the near future, but the decline will slow down.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com