SunSirs: Synthetic Ammonia: Global Imports Plummet Collectively; Supply-Demand Dynamics Reshape Market Outlook

The global trade landscape for synthetic ammonia is currently facing a severe contraction. Import volumes across numerous nations in Europe and Asia have declined sharply and simultaneously; specifically, the EU witnessed a year-on-year drop of over 40% in synthetic ammonia imports during the first quarter, while India saw a month-on-month decline exceeding 60% in a single month. With import demand from major global consumer nations plummeting collectively—compounded by shipping disruptions in the Middle East and the implementation of new carbon trading regulations—the international circulation of synthetic ammonia has contracted significantly. As production volumes trend downward in tandem, the industry's supply-demand situation is becoming increasingly strained. As a core raw material for sectors such as agricultural fertilizers, basic chemicals, energy, and environmental protection, synthetic ammonia serves a broad spectrum of downstream industries; consequently, fluctuations in its market pricing exert a profound influence on the entire industrial chain. Last week, domestic spot prices for synthetic ammonia exhibited a volatile, regionally divergent trend, driven by a confluence of international market transmission effects and domestic dynamics regarding production and sales.

I. Last Week's Spot Market Performance and Regional Pricing

Last week, the domestic spot market for synthetic ammonia followed a general trajectory of initial weakness followed by stabilization, characterized by distinct regional divergences. At the beginning of the week, market trading activity was sluggish, and mainstream quoted prices retreated slightly. However, during the mid-to-late week period, prices halted their decline and stabilized, bolstered by scheduled maintenance shutdowns at certain production facilities and manufacturers' resolve to hold firm on pricing. In the major production hubs of North China and Shandong, ex-factory quotes remained stable or saw slight upward adjustments, with the flow of goods remaining relatively smooth. In the East China market, trading was driven primarily by immediate, essential demand, resulting in narrow price fluctuations. The Central China and Southwest regions experienced tighter spot supplies due to facility maintenance shutdowns, leading to slight upward adjustments in quoted prices. Meanwhile, in the Northwest and Northeast regions—where transportation radii are more limited—prices remained stable, maintaining a rational price differential relative to the central and eastern parts of the country. Across the broader market, traders adopted a "buy-as-needed, sell-as-needed" strategy, showing little inclination toward large-scale stockpiling; consequently, spot market transactions were predominantly driven by orders fulfilling immediate, essential demand.

II. Domestic Production and Demand Landscape

The domestic synthetic ammonia industry possesses a massive overall production capacity. Last week, the industry's average operating rate remained at a moderate level; while facilities in certain regions entered their routine maintenance cycles—resulting in a short-term reduction in the volume of commercial ammonia available on the market—the overall total production volume remained within a relatively ample range. The industry currently exhibits the dual characteristics of possessing sufficient total capacity while experiencing temporary, phase-specific reductions in output.

On the demand side, the landscape is notably diversified. Downstream applications span a wide spectrum of sectors, primarily concentrated in fertilizer production, fine chemicals, industrial refrigeration, environmental denitrification (NOx removal), and raw materials for new energy technologies—with the fertilizer sector alone accounting for over 70% of total consumption. Currently, the agricultural fertilizer sector has entered its off-season; operating rates for compound fertilizers and phosphate fertilizers remain low, resulting in weak demand for synthetic ammonia procurement. On the industrial front, rigid demand for products such as nitric acid, caprolactam, and melamine remains stable; however, weak profit margins are constraining the willingness to purchase at high prices. Demand within the chemical deep-processing and environmental denitrification sectors remains rigid, providing a foundational support for the market. Amidst a global landscape of tight supply, rising prices in international markets are also indirectly bolstering the domestic market's resolve to maintain price levels.

III. April Customs Import and Export Performance (Year-on-Year)

According to customs data, in April 2026, domestic imports of synthetic ammonia declined both month-on-month and year-on-year. Conversely, the average import price rose against the prevailing trend; driven by climbing international shipping costs and rising prices in overseas markets, the landed cost of foreign-sourced cargo at domestic ports increased significantly. On the export side, a trend of simultaneous growth in both volume and price was observed: export volume saw a slight month-on-month increase in April, while the average export price surged year-on-year. A shortage of spot supplies in overseas markets spurred an outflow of Chinese-sourced ammonia, thereby diverting a portion of the domestic supply. Overall, the foreign trade landscape is characterized by declining imports accompanied by rising prices, and increasing exports accompanied by rising prices—a pattern consistent with the global trend of tightening synthetic ammonia supply.

IV. Price Analysis of Upstream and Downstream Products

Upstream, prices for raw materials—natural gas and coal—have fluctuated within a specific range, providing neutral cost-side support for synthetic ammonia. The limited volatility of raw material prices has not triggered any significant upward or downward swings in the synthetic ammonia market. Downstream, prices for fertilizer products such as urea and ammonium bicarbonate have undergone volatile consolidation, as the off-season for agricultural demand dampens purchasing sentiment. Prices for nitric acid, soda ash, and fine chemical raw materials have remained stable, reflecting a steady pace of rigid-demand procurement. Demand from the refrigeration and environmental denitrification sectors remains robust, providing a rigid floor of support for synthetic ammonia prices. Overall, price transmission throughout the industrial chain has been subdued; lacking strong momentum for significant price hikes, downstream sectors are currently capable only of absorbing supplies to meet their rigid, essential needs.

V. SunSirs Benchmark Price (June 1) and Future Outlook

On June 1, the SunSirs benchmark price for synthetic ammonia continued the stabilizing trend observed last week; quoted prices remained steady, showing no significant upward or downward fluctuations.

Looking ahead, the synthetic ammonia market is expected to maintain a pattern of range-bound volatility and regional divergence in the short term. On the supply side, production units that had been undergoing maintenance are gradually resuming operations, suggesting that market supply will soon return to ample levels. On the demand side, the agricultural off-season persists, and industrial demand is unlikely to see any concentrated surge; consequently, the upside potential for market prices remains limited. In the medium to long term, disruptions to shipping in the Middle East—coupled with the ongoing impact of the EU's Carbon Border Adjustment Mechanism (CBAM)—mean that the global tightness in synthetic ammonia supply is unlikely to ease rapidly; thus, elevated international prices will continue to provide support to the domestic market. Furthermore, when factoring in summer safety production controls and anticipated facility maintenance, domestic synthetic ammonia supply is expected to contract moderately in the coming period. This suggests a potential for the price equilibrium to shift steadily upward, resulting in an overall market trajectory characterized by short-term volatility but a medium-term upward bias.

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