Analysis: This week (6.16-20), the liquid ammonia market in Shandong was sluggish, with prices continuing the downward trend from last week. According to the Commodity Market Analysis System of Shengyi Society, the main production area of Shandong experienced a weekly decline of 0.98%. The main reason is the prominent supply pressure and excessive market inventory. The maintenance equipment is partially operational, and the supply side is loose. Coupled with the increase in the manufacturer’s urea to ammonia conversion capacity, the supply has significantly increased, and the increase in ammonia volume has dragged down the ammonia price. From the beginning of the week to the middle of the week, the prices of manufacturers have loosened, but as the weekend approaches, the mentality of enterprises to raise prices is gradually strengthening. Some large factories have made slight price increases, but the magnitude is very limited. A large factory in Shandong only increased by 20 yuan/ton. As of Friday, mainstream large factories in Shandong have generally lowered their prices by around 50 yuan/ton. Distributors mainly underreport shipments. And downstream procurement enthusiasm is not high, agricultural demand is still in the off-season, industrial demand remains rigid, and the overall demand side is bearish. At present, the mainstream quotation in Shandong region is 2300-2400 yuan/ton.
Prediction: In the near future, the market has entered a low season, with agricultural and industrial demand mainly following suit. The supply is sufficient, but the pressure on supply may partially ease in the later period. On the one hand, as prices hover at low levels or supply is tightened in the main production areas of the north, there is an increase in enterprise inspections and price hikes. From the demand side perspective, downstream procurement may continue to be sluggish, maintaining reasonable procurement demand. There is limited room for order growth in the later stage, and industrial demand urgently needs to be followed up. Taking all factors into consideration, liquid ammonia may still perform weakly next week, with prices mainly hovering at low levels.
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