SunSirs: Liquid Ammonia Saw Weak Growth Last Week and May Stabilize in the Future

Price trend

Last week (October 20-24), domestic liquid ammonia prices saw weak growth, failing to continue the upward trend of the previous week. According to the SunSirs Commodity Market Analysis System, prices in Shandong Province saw no weekly change. This was primarily due to increased production in some regions amidst stable downstream demand, easing supply pressure. As of October 24, the mainstream price of liquid ammonia in Shandong Province was between 2,150 and 2,250 RMB/ton.

Analysis review

On the supply side, supply remained reasonably balanced last week. Previously, some plants underwent maintenance, leading to slight reductions in production in Shandong, Henan, and Northwest China. Last week, some companies resumed work, leading to a slow increase in market demand and easing supply pressure. From the beginning of the week to the weekend, most companies did not adjust prices, indicating a generally balanced supply and demand market.

On the demand side, downstream demand was tepid, with compound fertilizer production rates remaining low, particularly in northern China. Transport restrictions, impacted by important meetings, had dampened demand. However, urea shipments recently increased, coupled with a high number of units undergoing maintenance, leading to a slight rebound in prices midweek. However, due to weak demand, subsequent demand was unlikely to be sustainable. According to the commodity analysis system, urea prices saw a weekly increase of 1.27%. Furthermore, domestic industrial demand was weak, while agricultural demand was primarily on-demand purchases and sporadic restocking. Demand had improved little, and a wait-and-see approach remained dominant in the market.

Future Outlook

Analysts at SunSirs believe that liquid ammonia may remain stagnant in the short term, with little change in recent equipment and a relatively abundant supply structure. In addition, there are not many positive factors on the demand side, agricultural demand replenishment is limited, the market purchases on demand, and industrial demand is the main factor. There are no bright spots in the market for the time being, and the ammonia market is expected to maintain an adjustment pattern.

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