This week (may 16-20), the domestic liquid ammonia market fell steadily. Shandong, Shanxi, Hebei, Henan and Hubei have declined to varying degrees. The cumulative weekly decline is 100-200 yuan / ton. The market supply has changed and the ammonia supply has increased. However, the demand for chemical fertilizer in the downstream is weak, and the resistance to high prices suppresses some rigid demand. Lower downstream prices, terminal prices have also been lower. According to the monitoring of business agency, as of May 20, the weekly decline of liquid ammonia in Shandong is 2.37%, and the mainstream quotation range at the weekend is 5000-5200 yuan / ton.

 

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Supply side

 

On the supply side, this week, the overall ammonia release in many domestic places increased slightly compared with the previous week, and the overall supply pressure increased. Previously, due to the high price of urea in the downstream, the majority of urea was transferred to the downstream, and the amount of ammonia decreased. However, the ammonia price has rebounded recently, and the amount of ammonia released by enterprises has increased significantly. Therefore, the overall supply of liquid ammonia surged, and the short-term surge in supply led to some excess.

 

Cost side

 

The upstream coal market is affected by the regulation policy, and the price maintains the previous level. At present, the profits of downstream methanol and liquid ammonia manufacturers are generally boosted. Natural gas prices also fell, easing the cost pressure of gas head enterprises. According to the monitoring of business agency, LNG fell by 1.50% this week.

 

Demand side

 

From the terminal point of view, the downstream demand for liquid ammonia remained rigid, the high price of urea remained stable, and the rise of ammonium nitrate, ammonium chloride and other products stopped and slowed down. Agricultural demand followed up on demand and industrial demand slowed down. The agricultural demand in Xinjiang, Jiangsu and Anhui is good, and follow-up is mainly on demand. The wait-and-see atmosphere of compound fertilizer enterprises towards high price urea is becoming stronger, the procurement slows down, the plate factory purchases on demand, the price of melamine decreases slightly, and the enthusiasm for urea procurement is weakened. From the perspective of supply: the daily output of urea this week is about 150000 tons, slightly lower than that of last week, and the urea inventory is at a low level. Internationally: Pakistan may seek China’s urea assistance again and plans to purchase 200000 tons. Various factors continue to drive up the price of urea. The policy of ensuring supply and price stability remains unchanged.

 

EDTA

From the above figure, the price comparison chart of urea and liquid ammonia shows that the trend of liquid ammonia and urea is basically the same. Recently, the price of liquid ammonia has fallen significantly, deeper than that of urea, and the price difference between them has widened. However, it is still at a reasonable level.

 

From the above figure and the liquid ammonia industry chain diagram, at present, the profits of the liquid ammonia industry chain continue to improve, the natural gas price in the upstream of the gas head falls, the coal price is affected by the policy, and the price remains weak, which is conducive to alleviating the downstream cost pressure. The middle and lower reaches are also mostly rising, with the increase of enterprise profits, and the profits of liquid ammonia, urea and compound fertilizer are significantly higher than those in the early stage.

 

Future forecast

 

The business society believes that at present, the supply and demand pattern of the domestic liquid ammonia market has changed, resulting in the transformation of the previous oversupply and oversupply. This pattern is difficult to change in the short term, so the price of liquid ammonia may still have room to fall. However, considering the high price of urea and the rising market, it will also support the price of ammonia. Comprehensively, the ammonia market may continue to fall, but the space should be treated with caution.

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