This week (6.6-10), the domestic liquid ammonia market continued to fall. 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 has further suppressed some rigid demand. Lower downstream prices, terminal prices have also been lower. According to the monitoring of the business community, as of May 20, the current weekly decline of liquid ammonia in Shandong is 0.63%, and the weekend mainstream quotation range is 4900-5150 yuan / ton.

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 partial excess.

Affected by the regulation policies, the upstream coal prices maintain the previous level. At present, the profits of downstream methanol and liquid ammonia manufacturers are generally boosted. The price of natural gas also declined, easing the cost pressure of gas head enterprises. According to the monitoring of the business agency, LNG fell by 2.20% this week.

Demand side

From the terminal point of view, the downstream demand for liquid ammonia remained rigid and the price of urea remained stable at a high level. The price rebounded slightly, with an increase of 1.5%. The agricultural demand increases, and the industrial demand is dominated by the rigid demand. In the northern wheat harvest area, the agricultural demand is appropriately followed up, and some southern areas purchase on demand. The enterprises of compound fertilizer and rubber plate plants started their business in general, mainly just needed to purchase. The price of melamine fell slightly, and their enthusiasm for urea purchasing weakened. From the perspective of supply, the daily output of urea is about 170000 tons, which is at a high level, but the factory inventory and social inventory are at a low level, and the supply of goods in some regions is tight.

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 dropped significantly, deeper than that of urea, and the price difference between them has widened. However, it is still at a reasonable level.

According to the above figure, the profit of liquid ammonia industrial chain continues to improve, the price of natural gas in the upstream of gas head drops, and the price of coal remains weak due to the impact of policies, which is conducive to easing the pressure on downstream costs. In the middle and lower reaches, the majority of the market also rose, and the profits of enterprises increased. The profits of liquid ammonia, urea and compound fertilizer increased significantly compared with the previous period.

Aftermarket forecast

The business agency believes that at present, the domestic liquid ammonia market price continues to loosen, and the inventory pressure of enterprises is obvious. As the agricultural demand enters the off-season, the liquid ammonia may have a downward risk.