SunSirs: Liquid Ammonia Continued Its Narrow Pullback Last Week; and the Market Is Expected to Stabilize in the Near Term

Last week (April 27–30), domestic liquid ammonia prices showed weak upward momentum, continuing the downward correction observed the previous week. According to the SunSirs Commodity Market Analysis System, the weekly decline in liquid ammonia prices in the Shandong region stood at 0.7%. The primary reason for this trend was that, against a backdrop of stable downstream demand, increased production output in certain localities continued to exert pressure on supply. Currently, the mainstream price for liquid ammonia in the Shandong region ranges from 2,600 to 2,800 RMB/ton.

From the perspective of supply, the market maintained a reasonable balance last week. Following a period in which some production units underwent maintenance—resulting in a slight reduction in scheduled output across regions such as Shandong, Henan, and the Northwest—these facilities continued their gradual recovery last week. Consequently, ammonia production volumes increased, leading to a slow but steady expansion of market supply. Throughout the week, from Monday to Sunday, most enterprises kept their pricing unchanged; however, a few companies in Shandong implemented minor price reductions of less than 100 RMB/ton. Overall, market performance indicated a fundamental equilibrium between supply and demand.

From the demand perspective, downstream activity remains lackluster. Notably, operating rates for compound fertilizers remain at low levels—particularly in northern regions—where downstream purchasing has cooled as the spring planting season draws to a close. Dampened by this weak demand, the sustainability of future demand appears insufficient; according to commodity analysis systems, urea prices saw a weekly decline of 0.27%. Furthermore, domestic industrial demand for essential inputs remains sluggish, while agricultural procurement is largely on an "as-needed" basis—characterized primarily by sporadic restocking. With little substantial improvement in overall demand, a wait-and-see mentality continues to dominate the market.

Market outlook

Analysts at SunSirs believe that the liquid ammonia market is likely to remain in a stalemate in the short term. With few recent changes to production facilities, the supply landscape remains relatively ample. Furthermore, there are limited positive drivers on the demand side; agricultural restocking remains limited, and market participants are purchasing strictly on an as-needed basis. With industrial demand serving as the primary driver and no immediate market highlights, the ammonia market is expected to maintain a pattern of consolidation.

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