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SunSirs: Raw Materials Plummeted & Supply and Demand Weakened, Liquid Ammonia Continued Its Decline

Increase font size  Decrease font size Date:2023-06-05   Views:59

  In May, the domestic liquid ammonia market continued its decline in April, but the decline slightly slowed down. According to the monitoring of the commodity market analysis system of SunSirs, as of May 31st, the cumulative decline in the main production area of Shandong this month was 7.22%. Manufacturers in the Shandong region had cumulatively lowered prices by around 200-300 RMB/ton this month.

  Analysis review

  On the raw material side, according to the monthly rise and fall chart of the liquid ammonia industry chain of SunSirs, the entire industry chain had declined, with both upstream natural gas and coal prices declining, with significant declines. Especially, the monthly decline in the price of thermal coal reached 17.68%, which formed a bearish outlook on the liquid ammonia market. At the same time, affecting both supply and demand, the market still performed relatively negative. On the production side, the inventory pressure of enterprises was high. To alleviate the pressure, factory prices continued to be lowered. On the one hand, supply increased, manufacturers' shipments had slowed down, and inventory pressure had increased. On the other hand, imported goods impacted the domestic market. On the demand side, downstream products such as urea and compound fertilizers lacked sufficient industry support, resulting in a decline in the entire product line. Maintained a weak trend. Urea and ammonium chloride experienced significant declines. Especially downstream ammonium chloride, the decline this month was nearly 28%. Downstream weakness had further exacerbated the supply-demand contradiction. As of 31st, the mainstream quotation for liquid ammonia in Shandong region was between 2,900-3,100 RMB/ton.

  Market outlook

  The downstream urea and compound fertilizer market continued to be weak, while the inventory reduction process of ammonia enterprises was slow, and it is expected that supply pressure will still exist in the near future. But in the near future, downstream agricultural demand has rebounded, and the price of feed liquid ammonia will stop falling. In the later stage, it may enter a range of fluctuations, and there is little possibility of a significant breakthrough.

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