After the Spring Festival, the demand in the liquid ammonia market remains strong

Thread Content

After the Spring Festival, demand in the liquid ammonia market remains strong. Author/Source: China Fertilizer Network Date: 2017-02-08 Clicks: 27. Following the Spring Festival holiday, the liquid ammonia market gradually returned to normal, with overall trends remaining similar to those before the festival. Factors such as restrictions on the use of hazardous materials transport vehicles during the holiday did not lead to a decline in demand. In fact, in some areas, the price of liquid ammonia increased by 50–80 yuan per ton, indicating a significant rise; supply remained relatively tight； In the Shijiazhuang area of Hebei, the reference price for liquid ammonia sold on credit has risen to around 2,600 yuan per ton. In the northern part of Shandong, the reference price for liquid ammonia sold in cash has increased to around 2,670–2,760 yuan per ton. In northern Jiangsu, the reference price for liquid ammonia sold on credit is around 2,850–2,880 yuan per ton. In Dalian in the Northeast, the reference price for liquid ammonia sold in cash has risen to around 3,000 yuan per ton; prices can be negotiated. Orders are primarily accepted in advance, and there have also been increases to varying degrees in other regions. 　　The reasons for this rise in liquid ammonia prices can be summarized into two aspects: First, the industry utilization rate in the liquid ammonia market is relatively low. During the Spring Festival, ammonia production facilities in most areas operated at reduced capacity. On one hand, manufacturers deliberately lowered their production levels in order to reduce shipping pressures and focused their production efforts on the urea market ； On the other hand, there are planned maintenance activities in some liquid ammonia-producing companies, as well as temporary equipment failures; these factors have resulted in those companies not being able to resume production yet. As a result of these two issues, the supply of liquid ammonia in the market is tight, keeping prices high or even causing them to rise. 　　The second is the support from upcoming demand. As demand in the fertilizer market picks up in spring, the demand for urea increases as well. In the near future, the operating rates of urea production plants are expected to rise. Meanwhile, production at compound fertilizer plants that were under maintenance will gradually resume; new projects in regions such as Inner Mongolia and Liaoning are already operating normally and shipping their products, which has led to an increase in the demand for liquid ammonia. 　　As can be seen from the chart above, compared to the market conditions during previous Spring Festivals, the liquid ammonia market has performed very differently this year – in fact, it has done extremely well. Although the restrictions on the transportation of hazardous materials vehicles during holidays also placed pressure on manufacturers to ship their products, after this year’s Spring Festival, there was a shortage of liquid ammonia supply and prices rose. As a result, manufacturers are still experiencing rising prices. Nevertheless, it is important to remind them about what the future trend for liquid ammonia might hold. 　　If there is any part of our analysis and market data that you would like to know more about, you can call the consultation hotline at 0451-88001128. To learn more about the market trends for liquid ammonia, please keep an eye on the official website of China Fertilizer Network (www.fert.cn), its mobile app (www.fert.cn/app), and its WeChat official account (ferinfo). 　　Looking at coal first, it is understood that there are currently no fluctuations in the coal market, with prices remaining stable. The downstream market is cautious regarding coal due to the Spring Festival, and purchases are not expected to increase significantly in the short term; as a result, there will be little impact on the price of liquid ammonia ； Secondly, as market demand picks up in spring, the demand for urea will increase, and accordingly the operating rate will rise as well; prices are expected to see a slight upward trend. The operating rates of compound fertilizer manufacturers will also increase, and both sectors will have an increasing demand for liquid ammonia. With environmental inspections becoming almost routine, the production conditions of liquid ammonia manufacturers, especially smaller ones, may fluctuate from time to time, which in turn will result in varying demands from downstream companies – with both positive and negative factors at play ； In the end, the methanol market will remain at high levels; in the short term, it is likely to continue to experience only slight fluctuations, so its impact on the liquid ammonia market is probably minimal. Overall, the price of liquid ammonia remains high, with slight fluctuations possible in some areas. (Tan Junying)