Price trend

On August 18th, approaching the weekend, domestic liquid ammonia gradually stopped falling and, but there was no clear signal of a rebound in the market. According to the Commodity Market Analysis System of SunSirs, the main production area in Shandong rose by 0.99% for the week, and the focus of weekend trading moved up 100 RMB/ton compared to the beginning of the week.

Analysis review

On the supply side, the main reason for the stopping falling and stabilization of liquid ammonia was that the increase in supply in Shandong region was less than expected. On the one hand, the construction of the Northern Main Production Area Alliance and Mingshengda Plant was affected, resulting in a decline in production. And the postponement of resumption of production in Mingshui Dahua. The combined performance of market demand this week was decent, with an increase in new orders and an improvement in supply and demand, allowing the ammonia market to stabilize and rebound. This week, prices of major factories in Shandong, Hebei, and other provinces generally increased by over 100 RMB/ton compared to the previous week. The inventory pressure on enterprises was reduced.

On the demand side, the agricultural demand was still acceptable, and the domestic demand and export of compound fertilizers remained stable. However, against the backdrop of high operating rates of downstream enterprises, manufacturers' procurement only increases without decreasing might lead to accumulation of inventory, and may face a change in the supply and demand pattern in the later stage. As of August 18th, the mainstream quotation in Shandong region was between 3,300-3,500 RMB/ton.

Market outlook

SunSirs’ liquid ammonia analysts believe that in the short term, liquid ammonia manufacturers still face the expectation of resuming production, and there is a high possibility of increasing supply in the later stage. This will continue to suppress the rebound of liquid ammonia, and the short-term small increase may only be a flash in the pan.

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