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SunSirs: In November, the Liquid Ammonia Market Ushered in A 'Little Spring'

November 10 2022 09:32:49     SunSirs (John)

Price trend

In the first ten days of November, the domestic liquid ammonia continued to rise, showing a "small spring" market. According to the monitoring of SunSirs, as of November 9, the liquid ammonia in Shandong had increased by 6.51%, and the market mainstream quotation was 4,000-4,300 RMB/ton.

Analysis review

After the initial shock and falling market, in November, the market supply and demand pattern improved, supply continued to tighten, and ammonia enterprises concentrated on boosting the market; Superimposed with the rise of downstream construction, the demand rose moderately, supporting liquid ammonia to walk out of the trough.

Specifically:

On the supply side, since this month, the supply of liquid ammonia has been tightened, and the annual routine maintenance and temporary maintenance of the enterprise's devices were too much, leading to a decline in the supply of major production areas in China to varying degrees. For example, the overhaul period of Hubei Yingde and Anhui Anqing exceeded one month. Temporary parking enterprises such as: Anhui Linquan, Henan Xinlianxin, Shaanxi Longmen, Hubei Yangfeng, etc. According to the calculation of SunSirs, the daily output loss of the overhaul enterprise exceeded 1500 tons.

The demand side also welcomed a positive turn. As the main downstream product of liquid ammonia, urea stopped falling and rebounded. According to the monitoring of SunSirs, urea continued to fall since the middle of September, and by November 9, it had rebounded 2.48% from the lowest point on October 25. As of September 9, the mainstream quotation in Shandong was around 2,500 RMB/ton. With the increase of urea enterprises' shipments in mainstream production areas and the drive of external procurement, the focus of urea trading moved up. As far as the downstream operation rate of liquid ammonia is concerned, the urea and compound fertilizer started to rise slightly, and the agricultural demand followed up just by rigid downstream. The industrial end, such as nitric acid and acrylonitrile, mostly maintained the initial level. On the whole, downstream demand showed a moderate growth trend.

On the other hand, in terms of cost, the coal market fell back recently. According to the monitoring of SunSirs, thermal coal fell by 9.21% this month. However, the time span was extended to the last three months, and the price of steam coal was still relatively high. It still supported the price of downstream liquid ammonia. But to some extent, it alleviated the cost pressure of downstream ammonia enterprises. At the same time, the low price of liquefied natural gas also eased the cost pressure of ammonia enterprises in Southwest China.

Market outlook

The liquid ammonia analysts of SunSirs believe that after the latest round of increase, the operating rate of ammonia enterprises will increase in the later period. There is a plan to resume production of some overhauled units in the middle and late November. The increase in supply in the later period will bring pressure to the ammonia market. More importantly, whether the demand can continue to follow up is the focus of the market. After entering the winter, agricultural demand turns weak, and industrial demand is difficult to improve. Under the supply and demand game, the ammonia market will return to rationality.

If you have any questions, please fee l free to contact SunSirs with support@sunsirs.com

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