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 Shengyi Society, as of February 25th, the price of liquid ammonia in Shandong Province has increased by 9.83% this week. At present, the mainstream price of liquid ammonia in Shandong region is between 2500-2700 yuan/ton.
Device maintenance increases, northern supply continues 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 are 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 is relatively strong. Taking the Shandong market as an example, manufacturers increased their prices by over 200 yuan/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 remains favorable. In addition, the downstream sector has slightly rebounded, and the operating rate of compound fertilizers continues to rise, increasing from 30% before the year to over 50%. The industrial sector maintains a strong demand, and the overall demand for liquid ammonia remains on the rise.
Downstream urea market improves first
In terms of downstream related products such as urea, urea is the first to rebound. According to the Commodity Market Analysis System of Shengyi Society, 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 1870 yuan/ton. The domestic urea fundamentals are expected to improve, and the demand for green manure is 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 are also cooperating to release production pace, and market sentiment continues to heat up.
Market forecast:
Business 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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