In November, the supply and demand pattern of liquid ammonia transformed, and the price surged and fell back

In November, the domestic ammonia market fluctuated, with the Shandong region rising and falling. According to the Commodity Market Analysis System of Business Society, as of the 30th, the monthly increase in liquid ammonia in Shandong region was 0.43%, but the amplitude exceeded 10%. At present, the mainstream price of liquid ammonia in Shandong region is between 3800-4000 yuan/ton.


From a supply side perspective, entering November, the market experienced a transition from tight to loose supply. In the first half of the month, the production of equipment decreased and the supply tightened, leading to an increase. Specifically, temporary failures frequently occur in equipment in Shandong region, and multiple sets of equipment are undergoing centralized maintenance. Due to environmental inspections in the Shanxi region, manufacturers have restricted production, increasing the pressure of tight supply in the entire northern region. In the second half of the month, with the resumption of production of some devices, the supply increased, downstream procurement decreased, and combined with the increase in ammonia emissions from large factories. Supply pressure continues to rise, manufacturers lower prices to ship, and the market follows suit.


On the demand side, downstream demand for liquid ammonia is stable, agricultural demand is growing moderately, and industrial demand is lagging behind. The main downstream products urea, ammonium chloride, and diammonium phosphate have all seen good growth rates. The maximum increase exceeds 4%. The overall demand is showing a moderate growth trend.


On the cost side, from an upstream perspective, coal prices have fluctuated and natural gas prices have risen significantly. While the cost side has provided support, it has also put cost pressure on ammonia enterprises, mainly because the increase in liquid ammonia has not kept up with the increase in natural gas prices.


Future Market Forecast:


According to analysts from Business Society, from a supply side perspective, manufacturers still have plans to resume production of their equipment in the later stage, and their inventory is at a medium to high level, entering the stage of destocking in the later stage. Supply pressure is difficult to alleviate in the short term. The demand side is intertwined, with agricultural demand performing well, but industrial demand is progressing slowly, and overall demand is not increasing significantly. Taking all factors into consideration, the more liquid ammonia there is in the near future, the more regions will follow suit and the market will have some room for decline.