SunSirs:The Liquid Ammonia Market Continued to Decline Last Week (June 16-20)

Price trend

This week (6.16-20), the liquid ammonia market in Shandong was sluggish, with prices continuing the downward trend from last week. According to the Commodity Market Analysis System of SunSirs, the main production area of Shandong experienced a weekly decline of 0.98%.

Analysis review

The main reason was the prominent supply pressure and excessive market inventory. The maintenance equipment was partially operational, and the supply side was loose. Coupled with the increase in the manufacturer's urea to ammonia conversion capacity, the supply had significantly increased, and the increase in ammonia volume dragged down the ammonia price. From the beginning of the week to the middle of the week, the prices of manufacturers had loosened, but as the weekend approached, the mentality of enterprises to raise prices was gradually strengthening. Some large factories made slight price increases, but the magnitude was very limited. A large factory in Shandong only increased by 20 RMB/ton. As of Friday, mainstream large factories in Shandong  generally lowered their prices by around 50 RMB/ton. Distributors mainly quoted low prices for shipments. And downstream procurement enthusiasm was not high, agricultural demand was still in the off-season, industrial demand remained rigid, and the overall demand side was bearish. As of June 20, the mainstream quotation in Shandong region was 2,300-2,400 RMB/ton.

Market outlook

Recently, the market has entered a low season, with agricultural and industrial demand mainly following suit, and the supply was sufficient. However, the supply pressure may partially ease in the later stage. On the one hand, as prices hover at low levels or supply was tightened in the main production areas of the north, there had been an increase in enterprise inspections and price hiked From the demand side perspective, downstream procurement may continue to be sluggish, maintaining reasonable procurement demand. There is limited room for order growth in the later stage, and industrial demand followed up on demand. Taking all factors into consideration, liquid ammonia may still perform weakly next week, with prices mainly hovering at low levels.

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