Price trend

This week (6.12-16), the domestic liquid ammonia market continued to decline. According to the monitoring of the Commodity Market Analysis System of SunSirs, on June 16th, the main production area of Shandong experienced a cumulative decline of 3.43% this week. Manufacturers in Shandong had cumulatively lowered prices by over 200 RMB/ton this week.

Analysis review

On the raw material side, natural gas prices rose, but coal was still in a downward trend, and the impact of cost sawing on liquid ammonia is gradually weakening. As of June 16, the main influencing factors on liquid ammonia were at both supply and demand ends. On the production side, factory prices continued to be lowered, with significant reductions in major northern production areas such as Shandong and Hebei, exceeding 200 RMB. Some manufacturers temporarily stopped selling for their own use. On the one hand, supply increased, manufacturers' shipments had slowed down, and inventory pressure had increased. Overlapping imported sources of goods had impacted the domestic market. On the other hand, downstream products such as urea and compound fertilizers lacked support in the industry, maintaining a weak trend. Urea, nitric acid, and DAP all showed varying degrees of decline. In addition, according to the price rise and fall chart of the liquid ammonia industry chain of SunSirs, the prices of other products such as ammonium chloride, ammonium nitrate and other products had not rebounded and were still hovering at a low level. Downstream weakness had further exacerbated the supply-demand contradiction. As of 16th, the mainstream quotation for liquid ammonia in Shandong region was between 2,600-2,800 RMB/ton.

Market outlook

The downstream urea market continued to be weak, while ammonia companies were still in the process of accumulating inventory, and it is expected that supply pressure will still exist in the near future. But in the near future, downstream agricultural demand has rebounded, and the price of raw material liquid ammonia will stop falling, but the significant upward momentum is limited.

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