1、 Price performance this week
This week (10.26-30), the domestic liquid ammonia market showed an overall downward trend and regional differentiation pattern. At the beginning of the week, local supply was tight to support quotations. With the continuous resumption of production of maintenance equipment and the increase in commodity ammonia flow, high price transactions were hindered, and the market center of gravity fell. Trading was mainly based on on-demand procurement for essential needs, and speculative replenishment willingness was weak. The characteristics of supply and demand game were obvious. According to the Commodity Analysis System of Shengyi Society, the weekly decline of liquid ammonia was 5.42%.
As of October 30th, in the Shandong region, the price range is 2600-2800 yuan/ton. Major factories have continuously lowered their quotes, while companies such as Hualu Hengsheng and Hebei Zhengyuan have lowered their ex factory prices multiple times, causing a shift in the market transaction center; The outsourcing of goods from the Northwest Inner Mongolia production area has increased, with a quotation of 2600-2720 yuan/ton; The circulation volume in the central and southwestern regions is relatively low, and the price is high, ranging from 2780-2900 yuan/ton. The average price this week has slightly decreased compared to last week, and the flow of high-level goods is not smooth. Some manufacturers are flexible in offering discounts to accelerate outbound shipments, while low-priced goods transactions are relatively smooth.
2、 Market analysis
Supply side: With the increase in production, the market supply is gradually increasing
The previously parked and reduced liquid ammonia units have completed maintenance and resumed production, and the overall operating rate of the industry has increased. The supporting urea self use ammonia is stable, and the external resources of commercial liquid ammonia are gradually increasing. Most of the northwest gas head devices are operating normally and continue to supply goods to North China and Shandong, forming a supply supplement to the main sales areas; There are still some temporary device failures in some areas that have led to short-term reductions, but the impact on the national supply pattern is limited. The inventory in the factory has gradually accumulated from a low level in the early stage, and some companies are under pressure to ship, which has loosened confidence in raising prices.
Demand side: Strong demand is the main focus, with insufficient overall follow-up efforts
Agriculture end: Downstream fertilizers Downstream (urea, compound fertilizers): Compound fertilizers Autumn fertilizer finishing and winter storage have not yet been launched on a large scale, industry production remains at a low level, purchasing in small quantities according to demand, weak willingness to proactively stock up, and weak pull on liquid ammonia. Downstream urea slightly rose this week, with an increase of only 0.43%.
On the industrial side, the profits of industries such as nitric acid, melamine, and caprolactam are generally average, and the equipment maintains moderate load operation. The increase in orders is limited, and resistance is obvious under high prices. They basically insist on using and purchasing as needed, and rarely engage in large-scale order locking and stocking operations.
Cost side: Cost support is weaker than supply increase
Cost: Coal prices have fluctuated, and this week the thermal coal market has been fluctuating. The cost of coal to liquid ammonia remains relatively stable, providing a certain bottom support for liquid ammonia prices; But the current market dominant logic is loose supply and demand, with weak cost support, making it difficult to drive prices to continue rising.
3、 Future prospects
The short-term liquid ammonia market may continue to fluctuate and consolidate weakly. On the supply side, the resumption of production equipment continues to release sources of goods, making it difficult to quickly reverse the loose supply pattern of commodity ammonia; The demand side needs to wait for the concentrated launch of winter storage orders for compound fertilizers and the recovery of downstream industrial profits before it is expected to bring sustained incremental growth.
Taking all factors into consideration, the liquid ammonia market is expected to fluctuate and consolidate in the short term, with a tendency to fall but difficulty in rising.