Price trend

Last week (12.16-20), the liquid ammonia market in Shandong remained sluggish, with prices fluctuating and falling. According to the Commodity Market Analysis System of SunSirs, the main production area of Shandong experienced a weekly decline of 1.57%.

Analysis review

The main reason was that the supply pressure continued to increase, and the operating rate of the equipment was generally high. The increase in the operating rate of manufacturers, coupled with the sluggish urea market, led some manufacturers to switch to ammonia, further exacerbating the contradiction of oversupply in the ammonia market. From the beginning of the week to the weekend, some mainstream large factories in Shandong generally lowered their prices by around 100 RMB/ton. Distributors mainly underreport shipments. And downstream procurement enthusiasm was not high, agricultural demand was still in the off-season, industrial demand remains rigid, and the overall demand side was bearish. As of December 20th, the mainstream quotation in Shandong region was 2,570-2,700 RMB/ton.

Market outlook

The market entered the off-season for fertilizer procurement, and downstream operating rates had significantly decreased. Industrial demand followed suit, and the supply was sufficient. However, the problem of oversupply in the later stage may continue. However, there may be regional differentiation in the later stage of the market. On the one hand, the operating rate will decline with the decrease of prices, and it is not ruled out that there may be pricing issues for enterprises. In addition, rainy and snowy weather in Northeast China, Inner Mongolia and other places may put pressure on transportation, and there may be a shortage of local supply. Considering all factors, liquid ammonia will remain at a low level and fluctuate mainly next week, and it is difficult to have good performance in the short term.

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