In late November, the domestic liquid ammonia market mainly fluctuated and fell, breaking out of a trend of first rising and then falling. According to the Commodity Market Analysis System of Shengyi Society, liquid ammonia recorded a decline of 0.48% in the second half of the year.
Since the end of the month, liquid ammonia has reversed the downward trend in the middle of the month. The prices of manufacturers have been steadily rising, and the overall operating rate of domestic manufacturers has significantly declined, especially in the northern main production areas where ammonia emissions are generally low. The urea plant in Shandong is operating normally, with some parts transitioning to urea production and a significant reduction in ammonia release. In addition, some facilities in Anhui, Shanxi, and Northeast China have not yet started production, resulting in tight market demand for ammonia. In addition, some facilities in Shandong have also undergone short-term maintenance due to malfunctions. The supply has not been followed up yet. The ex factory price of liquid ammonia has naturally increased several times. Shandong manufacturers have generally raised prices 2-3 times within the week, with a cumulative increase of over 100 yuan/ton. The market performance is in short supply.
Towards the end of the month, in the last week of November, the market experienced a general decline, with prices in Shandong dropping from 2800 yuan to around 2600 yuan in the latter half of the month. In addition, the northwest and Inner Mongolia have also experienced declines along with the downturns in Shanxi, Shaanxi, and other regions. Due to increased supply pressure, there is a significant increase in the conversion of liquid ammonia in regions such as Shandong and Hebei, leading to an increase in the potential for ammonia production. In addition, most of the facilities in Central China, Northwest China, and other regions have been operating steadily, while new production capacity in Ningxia has been gradually released. The increase in supply has led to manufacturers accumulating inventory, forcing them to lower prices for shipments.
Future forecast
Business analysts believe that from the supply side, under the expectation of equipment maintenance, the supply pressure in the main production areas of the north will gradually ease, and there is a high possibility of a later decline. In addition, as winter enters, the increase in rain and snow weather in the north may limit short-term supply, and local supply-demand imbalances may lead to an increase in price differences.
From the demand side perspective, the early replenishment is gradually coming to an end, agricultural demand is gradually falling, and industrial demand is maintaining rigid demand. This may pose a constraint on ammonia prices in the future. However, considering that imports are still at a low level, a reasonable balance between supply and demand should be maintained in the short term.
Taking all factors into consideration, the price of liquid ammonia is expected to stabilize and stop falling in the near future. In the short term, due to the easing of supply pressure, there may still be room for price surges. However, under the expectation of weak demand during the winter off-season, the supply-demand game will intensify, and the ammonia market may experience fluctuations.
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