Price trend

This week (12.23-27), the liquid ammonia market in Shandong region showed weak performance, with prices continuing to decline. According to the Commodity Market Analysis System of SunSirs, the main production area of Shandong experienced a weekly decline of 1.25%. As of December 27th, the mainstream quotation in Shandong region was 2,500-2,600 RMB/ton.

Analysis review

The main reason was that the contradiction of oversupply was difficult to alleviate, and the supply pressure had increased. The early maintenance equipment had gradually resumed, and the operating rate of manufacturers had increased. Coupled with the poor performance of the urea market, some manufacturers had switched to ammonia, which had further exacerbated 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 50-100 RMB/ton. Distributors mainly underreport shipments. And downstream procurement enthusiasm was not high, agricultural demand was still in the off-season, industrial demand remained rigid, and the overall demand side was bearish.

Market outlook

The market entered the traditional off-season, and fertilizer procurement cooled down. The operating rate of downstream fertilizer factories had significantly decreased, and industrial demand had followed suit. The supply was sufficient, and the supply pressure may continue to increase in the later stage. But in the later stage, the market will show regional differentiation. On the one hand, the operating rate will decline with the decrease of prices. In addition, rainy and snowy weather in Northeast China, Inner Mongolia and other places may put pressure on transportation, and local supply may be scarce. Considering all factors, the price of liquid ammonia may still be difficult to improve next week. The main production areas will continue to decline, but in some areas it may stop falling and stabilize. Local differentiation may bring about price fluctuations.

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