This week (June 13-17), the price of domestic liquid ammonia fell sharply. Shandong, Shanxi, Hebei, Henan and Hubei have declined to varying degrees. The weekly decline accumulated around 300 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 June 17, the current weekly decline of liquid ammonia in Shandong is nearly 5%, and the mainstream quotation range at the weekend is 4600-4850 yuan / ton.
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Supply side
On the supply side, this week, the overall ammonia release in many domestic places continued to rise compared with the previous week, and the overall supply pressure increased. The urea price retreated, and the manufacturer’s profit was poor, resulting in the reduction of the unit’s conversion to urea. Recently, the ammonia quantity is still rising. Therefore, the overall supply of liquid ammonia surged, and the short-term surge in supply led to partial excess.
Cost side
The upstream coal market is gradually warming up, squeezing the downstream liquid ammonia profits. However, the national regulation of coal prices is still within a reasonable range, and the downstream cost pressure is not large. At present, the downstream methanol and liquid ammonia manufacturers’ profits are still within a reasonable range. The price of natural gas also declined, easing the cost pressure of gas head enterprises. According to the monitoring of the business community, LNG rose by 0.79% this week.
Demand side
From the terminal point of view, the downstream demand for liquid ammonia is rigid and stable, with no increment. The price of urea fell, and ammonium nitrate, ammonium chloride and other products mainly stopped rising. The agricultural demand is weakened and the industrial demand is insufficient. Buying up rather than buying down, agricultural fertilizer preparation slowed down. The wheat harvest gradually ended and agricultural demand weakened. Compound fertilizer is mainly followed up according to the needs. Plate plant enterprises are generally started, and just need to purchase. Melamine prices have decreased slightly, and their enthusiasm for urea procurement has weakened. From the perspective of supply, the daily output of urea was maintained at a high level, and the urea supply increased due to the release of some summer tube fertilizers.
| Sodium Molybdate |
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.
From the above figure, the profit of the liquid ammonia industrial chain is still within a reasonable range. The price of natural gas upstream of the gas head has been declining in the early stage. At present, the increase is limited, but the coal price continues to rise. Affected by the policy, the price is still under control, which is conducive to easing the pressure on downstream costs. Due to the weakening of seasonal demand, the middle and lower reaches such as urea turned down, the rise of compound fertilizer stopped, the enterprise profits met the test, and the profits of liquid ammonia, urea and compound fertilizer decreased significantly compared with the previous period.
Aftermarket forecast
According to the business agency, at present, the supply pressure in the domestic liquid ammonia market has increased, and the shipment speed of manufacturers has decreased significantly. In addition, the weakening of agricultural demand has also brought bad news. Therefore, the price of liquid ammonia may still fall.
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