In October, domestic liquid ammonia did not continue the downward trend of the previous two months, and the market gradually stabilized. The market first fell and then rose, and by the end of the month, the market price had basically returned to the level at the beginning of the month. According to the Commodity Market Analysis System of Shengyi Society, the decline of liquid ammonia in Shandong Province in October was 0.44%. As of the end of the month, the mainstream price of liquid ammonia in Shandong region is between 2200-2270 yuan/ton.
The production schedule of the device does not decrease, and the market inventory is still high
From a supply side perspective, the supply-demand structure still leans towards surplus. As we enter October, the operating rate remains at a medium high level, with few maintenance manufacturers and no reduction in production output. The inventory pressure of enterprises is high, and in order to alleviate the pressure, factory prices have fallen more than they have risen. Secondly, the impact of external sources of goods has led to an increase in import volume, while low-priced foreign sources have impacted the domestic market. Supply is in an oversupply situation. Although some manufacturers experienced short-term malfunctions and reduced production after mid month, resulting in a slight rebound in enterprise quotations, at the end of the month, with some devices resuming operation, the upward trend did not continue. Some manufacturers in Shandong experienced a slight price correction, and the market still did not shake off the weak trend. Overall, there has been little change in ammonia prices during the month, and the adjustment space continues to narrow. On the demand side, the peak season for agricultural demand is not strong, and downstream industries such as urea and compound fertilizers lack support. Industrial demand remains rigid and fluctuates little. Downstream weakness makes it difficult for the market to improve.
The cooling of the industrial chain is mainly due to the weakness of the upstream and downstream
From the perspective of the liquid ammonia industry chain chart, upstream natural gas has seen a significant increase, with a monthly decline of 12.82%, which has brought more cost pressure to gas ammonia companies. Especially in the downstream sector, it is still generally cold, with more declines and less gains. Especially urea is still lukewarm, according to monitoring, urea fell by 0.85% in October. This is mainly reflected in weak downstream demand, low season in agriculture, and the current increase in compound fertilizer production not meeting market expectations. The terminal production in the industrial demand field is also showing a downward trend. The market is generally dominated by rigid demand, and the demand side is restricting the ammonia market from getting out of the slump.
Market forecast:
Business analysts believe that from a supply side perspective, there will be little change in the future market supply and demand pattern, and the market will lean towards supply-demand balance. The devices will start and stop, and the impact will tend to weaken. The mentality of enterprises to raise prices may be reflected, and the downward space in the later stage may be compressed. The supply and demand pressure will continue to ease in November.
From the demand side, in the short term, demand remains stable, and expectations may be weak in the later period. On the one hand, the concentrated procurement during the agricultural peak season is scattered, and the market lacks speculative sentiment, resulting in light trading. In addition, industrial demand remains dominated by rigid demand, and overall, downstream liquid ammonia may continue to drag down its price recovery in the later stage.
Taking all factors into consideration, the price of liquid ammonia is expected to maintain a range of fluctuations in the short term, with prices remaining at a low level. In the later stage of supply and demand competition, liquid ammonia may still be difficult to break free from the weak oscillation pattern. We need to pay attention to the manufacturer’s equipment start-up news in the later stage.
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