SunSirs: With Weak Supply and Demand, Liquid Ammonia Continued Its Downward Trend Last Week

Price trend:

Last week, the domestic liquid ammonia market continued its downward trend, showing a sluggish performance. According to the business data analysis system of SunSirs, the price of liquid ammonia in Shandong province fell by 2.05% last week (December 22-26). This was mainly due to ample ammonia supply, coupled with the impact of rain and snow in northern China affecting market circulation, and ongoing local environmental inspections. As of December 26, the mainstream price of liquid ammonia in Shandong was 2,300-2,500 RMB/ton.

Market Analysis

From a supply perspective, supply continued to increase last week compared to the previous week. Liquid ammonia production in Shandong and Hebei regions remained high, and supply from plants in Central China resumed, leading to increased ammonia availability. In some northern regions, transportation was restricted due to snowy weather, resulting in inventory accumulation at some companies. From the beginning to the end of the week, some companies in the northern region lowered their prices, with the price cuts being deeper than the week before last. Major manufacturers in Shandong generally lowered prices by 100-150 RMB/ton. The market showed an oversupply situation, and companies still have expectations of resuming production later, suggesting that supply may continue to increase in the future.

From the demand side, downstream demand remained weak. The operating rate of compound fertilizer plants remained low, and some downstream phosphate fertilizer companies were experiencing reduced operating rates due to environmental regulations, resulting in relatively weak demand. Urea shipments were stable recently, and although prices were still rising, the increase had slowed significantly. However, prices did not continue to rise towards the end of the week. According to commodity analysis systems, the weekly increase in urea prices was 0.14%. Furthermore, domestic industrial demand remained weak, and agricultural demand was mainly based on need-based purchases and sporadic restocking. Overall demand improvement was limited, and a wait-and-see attitude still dominated the market.

Market Forecast:

According to analysts at SunSirs, the liquid ammonia market is expected to continue facing supply and demand pressure next week, mainly due to the anticipated resumption of production at some facilities, which posed a supply risk to the market. Coupled with the off-season for agricultural demand and the slow decline in downstream operating rates, the ammonia market is unlikely to improve, and there may still be room for further price decreases in the future.

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