Entering February, the market gradually bottomed out and stabilized, driven by the dual benefits of tightening supply and recovering demand. In the latter half of the year, the market started and prices rose sharply. According to the Commodity Market Analysis System of Shengyi Society, as of February 28th, the price of liquid ammonia in Shandong Province increased by 11.84% during the month. At the end of the month, the mainstream price of liquid ammonia in Shandong region was between 2600-2800 yuan/ton.

Device maintenance increases, northern supply continues to tighten

From a supply perspective, the overall supply of liquid ammonia in the market tightened in February, with some equipment undergoing maintenance. On the one hand, there were more companies scheduled for maintenance during the Spring Festival, and on the other hand, as the end of the month approached, the number of faulty equipment increased, affecting 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, in the last week of the month, manufacturers increased their prices by more than 200 yuan/ton. In addition, the increase in self use of ammonia plants has resulted in fewer sources of goods entering the market.

The overall performance of the industrial chain is strong

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, with an increase of up to 7.34%. At the end of the month, the upward trend continued, with a slight slowdown in the increase, and the cost remained 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 fertilizer demand increases

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 rose as high as 8.63% in February, and the upward trend slowed down at the end of the month, maintaining a strong market rigidity. As of the end of the month, 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 strong trend. The main reason is that the supply side may remain tight in the near future. Although there are expectations for the recovery of faulty devices, there are too many planned maintenance companies. It is expected that prices will remain high at the beginning of next month. However, from mid month to the end of the month, due to the impact of device recovery expectations, the supply is expected to increase, and the market will show some supply pressure. There is a possibility of a decline in the price of liquid ammonia.