SunSirs: Liquid Ammonia Prices Rebounded This Week, and the Prices May Stabilize Later

Price trend:

This week (December 8-12), domestic liquid ammonia prices rebounded. According to SunSirs commodity market analysis system, the weekly increase in liquid ammonia prices in Shandong was 3.44%, a relatively strong increase. This was mainly driven by supply contraction due to localized plant maintenance under environmental protection-related production restrictions in northern regions, coupled with improved downstream demand. Currently, the mainstream price of liquid ammonia in Shandong is between 2,450-2,650 RMB/ton.

Market Analysis

From the supply side, the supply-demand balance continued to improve this week, with supply remaining tight. Environmental protection-related production restrictions in Henan province led to lower operating rates for enterprises, coupled with reduced supply in some surrounding areas such as Shanxi and Hebei, resulting in a decrease in supply. Additionally, prices in Northwest and Inner Mongolia were affected by Hebei and Shanxi, leading to a coordinated price increase. The maintenance season for gas-based ammonia plants in Southwest China continued to have an impact, with reduced production and lower operating rates, resulting in a slight rebound in ammonia prices in the Southwest. This week, manufacturers in Shandong province raised prices by 100-200 RMB/ton, with varying degrees of price increases from the beginning to the end of the week. The market was characterized by supply falling short of demand.

On the demand side, downstream demand has improved slightly, with a positive order intake atmosphere. The operating rate of compound fertilizer plants continues to improve. Overall, in agriculture, agricultural procurement demand continues to rise, while industrial demand remains at a basic level, with demand showing a moderate upward trend. However, the price increase of downstream urea is weak, having already reached a high level, and there may not be much room for further growth. According to SunSirs commodity analysis system, urea prices fell by 0.15% this week, with end-users strengthening their purchasing power and mostly buying on dips.

Market Outlook

Analysts at SunSirs believe that the rise in ammonia prices this week was mainly driven by positive supply-side factors. However, with the expected resumption of maintenance at plants in northern China next week, the tight supply situation may ease later, and the potential for further price increases in liquid ammonia is expected to be limited.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.