Analysis: 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 Shengyi Society, the main production area of Shandong experienced a weekly decline of 1.57%. The main reason for the increasing supply pressure is that the operating rate of the equipment is generally high, and the operating rate of manufacturers has increased. Coupled with the sluggish urea market, some manufacturers have switched to ammonia, which has 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 around 100 yuan/ton. Distributors mainly underreport shipments. And downstream procurement enthusiasm is not high, agricultural demand is still in the off-season, industrial demand remains rigid, and the overall demand side is bearish. At present, the mainstream quotation in Shandong region is 2570-2700 yuan/ton.
Prediction: The market has entered the off-season for fertilizer procurement, with a significant decrease in downstream operating rates, industrial demand following suit, sufficient supply, and 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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