Basic trend

In May, the domestic liquid ammonia market was mainly volatile and rising, breaking out of a trend of first rising and then falling. According to the Commodity Market Analysis System of Business Society, liquid ammonia recorded a growth rate of 3.91% in May. At the end of the month, the mainstream quotation in Shandong region is between 3000-3200 yuan/ton.

make a concrete analysis

In the first half of the month, liquid ammonia continued its rebound trend at the end of April. In May, prices of manufacturers continued to rise, and the overall operating rate of domestic manufacturers significantly declined, especially with relatively low ammonia emissions in the main production areas in the north. Equipment maintenance is concentrated in Shandong, Hebei, Shanxi and other regions, with a significant decrease in ammonia emissions in the northern main production areas. In addition, there are also device failures and shutdowns in the two lakes area of central China, resulting in a tight market performance for ammonia. The supply has significantly declined during the same period. The ex factory price of liquid ammonia has naturally been repeatedly raised. In the week after the holiday, Shandong manufacturers generally raised prices 2-3 times, with a cumulative increase of 200-300 yuan/ton. The market performance is in short supply.

After mid month, the liquid ammonia market experienced a reversal, with a sharp decline in the market. There was a general decline in various markets, with prices in Shandong dropping from 3300 yuan to around 2900 yuan in the latter half of the year. In addition, the Northwest and Inner Mongolia have also experienced declines along with the decline in Shanxi, Shaanxi and other regions. The main reason is the increased supply pressure, with more liquid ammonia being converted in Shandong, Hebei and other regions, resulting in an increase in ammonia volume. In addition, most facilities in central and northwest China have been operating steadily, and increased supply has led to a general accumulation of inventory by manufacturers. Manufacturers generally lower prices to clear inventory and reduce pressure.

As the end of the month approached, liquid ammonia rebounded again, mainly due to the low inventory levels of manufacturers and the impact of device failures. The supply in northern main production areas such as Shandong, Hebei, and Shanxi slightly tightened. In addition, some devices are expected to reduce production, and the market atmosphere is performing well, especially with a delay in the downstream agricultural demand peak season and no reduction in procurement, which is related to demand follow-up.

Future Market Forecast

Analysts from Business Society believe that from the supply side, under the expectation of device maintenance, the tight supply pattern in the northern main production areas may continue for a period of time, and ammonia prices will be supported on the supply side.

From the demand side, agricultural demand remains primarily in demand, with demand increments or declines mainly due to a decrease in downstream compound fertilizer production rates and a slowdown in downstream procurement. In addition, the agricultural fertilizer preparation node has not yet arrived, and the next two weeks are in a period of agricultural demand gap, and the centralized procurement period has not yet arrived.

Taking all factors into consideration, the price of liquid ammonia will be relatively rigid in the near future, and there is still room for price upward movement in the short term due to reduced supply. However, in the expectation of weak demand in mid to late June, the supply-demand game will intensify, and the ammonia market situation may fluctuate.