This week (3.20-24), the domestic ammonia market continued to decline, with prices in major production areas such as Shandong, Hebei, Shanxi, and Lianghu dropping to varying degrees. According to the monitoring of the Business News Agency, as of Friday, the drop in liquid ammonia in Shandong Province was 3.24%, which was slower than last week. The main supply performance is tolerant, and under the pressure of accumulated inventory, enterprises continue to adjust and reduce, adding to the negative agricultural demand window, resulting in a continuous decline in prices due to the imbalance between market supply and demand. Currently, the mainstream price of liquid ammonia in Shandong is 3900-4050 yuan/ton.

From the perspective of supply, the overall operating rate of domestic manufacturers continues to pick up, especially in the northern region, where manufacturers and devices operate normally. Large factories have accumulated inventory to guide manufacturers to continuously reduce their listing prices. According to the monitoring of the Business News Agency, manufacturers in Shandong generally lowered their listing prices by 100-200 yuan/ton during the week. Many devices in the southern region have resumed production, and the supply increase has further exacerbated the contradiction between supply and demand in the market.

On the demand side, the ammonia market reversed its previous supply shortage situation in the last ten days. On the one hand, agricultural demand turned weak, and industrial demand could not follow up in a timely manner. Since the middle of the month, the price of liquid ammonia has gradually fallen from its high point. In terms of downstream urea, according to monitoring by the Business News Agency, urea continued its decline, with a weekly decline of 0.31%. Due to the withdrawal of agricultural demand and the end of the peak season of returning green fertilizer, the procurement volume of composite fertilizer and board market declined. The weakening of downstream demand support is an important reason for the decline of liquid ammonia.

From the perspective of the industrial chain, the cost side also remained negative. In particular, the price of liquefied natural gas has fallen by 3.58% this week, following a sharp 7.3% drop last week. The sharp decline in natural gas has had a significant impact on southwest gas head ammonia companies, providing ammonia companies with conditions for price reduction sales under the generally light market volume. The coal market has maintained a weak range of adjustment, with prices hovering at a relatively low level. Overall, the negative pressure on the cost side of the ammonia market is high.

Future Forecast:

Analysts from the Business Agency believe that from the supply side, the decline in ammonia prices has decreased this week, and some ammonia companies may switch to urea production or alleviate the supply pressure in the ammonia market. The downward space for the future ammonia market is limited. In the future, the demand side will still face pressure, with agricultural demand stagnating and industrial demand lagging behind. Therefore, supply and demand are still weak in the near future. Adding to the negative impact of downstream pressure on upstream feed gas, it is expected that liquid ammonia will maintain a weak volatility pattern in the short term.