The liquid ammonia market has experienced continuous fluctuations and downturns in the previous two months, gradually bottoming out and stabilizing in February. This week (2.10-14), domestic liquid ammonia rose. According to the Commodity Market Analysis System of Shengyi Society, the weekly increase of liquid ammonia in Shandong region was 2.15%. The main reason is the stable downstream demand, and the high-speed lifting after the holiday has ensured smooth transportation. Partial maintenance of equipment in northern regions has relieved supply pressure. In addition, downstream resumption of work after the holiday has increased procurement volume. At present, the mainstream price of liquid ammonia in Shandong region is between 2250-2450 yuan/ton.

Device maintenance increases supply pressure relief

In terms of supply, after the holiday, the supply is basically stable, and the supply pressure has slightly eased. The production of equipment in the main production areas of the north has slightly decreased. Since February, there has been an increase in maintenance equipment, but companies such as Runfeng have not resumed work. And the temporary shutdown of ammonia companies due to malfunctions has affected some of their production. Mainly manifested in Shandong, Hebei, Anhui, and the Two Lakes region. At the beginning of the week, prices generally increased, but prices stabilized from mid week to the weekend, with manufacturers raising prices by over 100 yuan/ton this week. The market shows a basic balance between supply and demand.

The overall industrial chain has slightly improved

From the perspective of the liquid ammonia industry chain diagram, the upstream and downstream environment of liquid ammonia has slightly improved, and the upstream natural gas has shaken off the sluggish situation in January, with prices rising this week by 2.74%. In addition, the downstream sector has generally rebounded, mainly reflected in the strong rigidity of downstream demand and a slight rebound in agricultural demand; In addition, industrial demand remains primarily driven by essential needs. The main downstream product is urea (0.98%).

Downstream urea market slightly rebounds

In terms of downstream related products such as urea, the urea market has rebounded this week with a slight increase in prices. According to the Commodity Market Analysis System of Shengyi Society, the domestic urea market has risen by 0.98%. As of this Friday, the mainstream quotation for small and medium-sized particles in Shandong region is around 1700-1750 yuan/ton. The increase in urea prices is very limited, mainly due to the fact that agricultural demand has not truly improved, only due to post holiday purchases by end-users and speculative behavior by traders to buy at the bottom. The market trading atmosphere has improved compared to the previous period. The increase in shipments from urea factories is limited, but inventory pressure has slightly eased. The short-term supply and demand situation may maintain a basic balance, and prices will continue to consolidate.

Market forecast:

Business analysts believe that the recent surge in liquid ammonia prices is expected to be a short-term behavior, with a slight cooling of the weekend trading atmosphere and weak increases in manufacturer quotes. The supply side will enter a period of device recovery, and there will be fewer maintenance devices than resumption devices in the later stage, leading to an expected increase in supply pressure. But there is no bright spot on the demand side, and the operating rate of downstream factories is insufficient, which will suppress the shipment speed of ammonia plants. The price of liquid ammonia is prone to decline but difficult to rise in the later stage.