Price trend

After experiencing continuous fluctuations and downturns in the previous two months, the liquid ammonia market gradually bottomed out and stabilized in February. After this week, liquid ammonia prices have risen significantly due to the dual benefits of supply tightening and demand recovery. According to the Commodity Market Analysis System of SunSirs, as of February 25th, the price of liquid ammonia in Shandong Province has increased by 9.83% this week. As of February 25th, the mainstream price of liquid ammonia in Shandong region was between 2,500-2,700 RMB/ton.

Device maintenance increased, northern supply continued to tighten

In terms of supply, the supply of liquid ammonia has continued to tighten recently, with some equipment undergoing maintenance. On the one hand, there were more companies scheduled for maintenance during the Spring Festival. On the other hand, the recent increase in faulty equipment has affected some production, mainly concentrated in northern regions such as Shandong, Henan, and Shaanxi. So, the increase in liquid ammonia prices in the northern market was relatively strong. Taking the Shandong market as an example, manufacturers increased their prices by over 200 RMB/ton for two working days this week. In addition, the increase in self use of ammonia plants has resulted in fewer sources of goods entering the market.

The overall industrial chain has slightly improved

From the perspective of the liquid ammonia industry chain chart, there has been a slight improvement in the upstream and downstream environment of liquid ammonia. The upstream natural gas continued to rise in February and continued to rise this week, with a slight slowdown in the increase. The cost side remained favorable. In addition, the downstream sector has slightly rebounded, and the operating rate of compound fertilizers continued to rise, increasing from 30% before the year to over 50%. The industrial sector maintained a strong demand, and the overall demand for liquid ammonia remained on the rise.

Downstream urea market improved firstly

In terms of downstream related products such as urea, urea was the first to rebound. According to the Commodity Market Analysis System of SunSirs, urea has increased by nearly 10% in the past two weeks, and its upward trend has slightly slowed down this week. As of this Tuesday, the mainstream quotation for small and medium-sized particles in Shandong region is around 1,870 RMB/ton. The domestic urea fundamentals are expected to improve, and the demand for green manure was increasing, which has increased the demand for urea. In addition, industrial demand has continued to increase, and urea has experienced a small peak in production and sales. Manufacturers were also cooperating to release production pace, and market sentiment continued to heat up.

Market outlook

SunSirs’ analysts believe that in the short term, the liquid ammonia market is expected to maintain a warming trend. The supply side may remain tight in the near future. Although the recovery of faulty devices is expected, there are too many planned maintenance companies, and it is expected that the market supply will not ease before the end of the month. In addition, the demand during the peak season for agricultural needs has not yet subsided, coupled with the low inventory of enterprises and society, liquid ammonia will still peak at the end of the month.

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