How much longer can the synthetic ammonia market hold on?

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How much longer can the synthetic ammonia market hold on? Author/Source: JINLIANCHUANG FERTILIZERS Date: 2017-02-24 Clicks: 2 Recently, the synthetic ammonia market has been in a state of fluctuation and stabilization; prices have declined slightly in some areas, while they have risen marginally in others. The overall trend remains stable. Industry experts are mostly focusing on how long the domestic market can remain in a period of fluctuation and consolidation; Jinlianchuang provides the following detailed analysis. 　　Since after the Spring Festival, the domestic synthetic ammonia market has remained on an upward trend. Starting from mid-February, the market entered a period of consolidation, after which some regions began to adjust their selling prices accordingly based on their own sales conditions. First, prices in the northern Jiangsu region dropped first. There are mainly two reasons for this decline: one is a reduction in the volume of orders from downstream clients ； On the other hand, the prices are relatively high compared to other areas in the vicinity, resulting in a large price gap and putting pressure on sales. Affected by the decline in prices in northern Jiangsu, prices in northern Anhui dropped by 30 yuan per ton, after which sales continued at the current level ； Meanwhile, the price in the Two Lakes region also dropped by 30–50 yuan per ton, while southern Shandong saw a decrease of 30 yuan per ton as well ； Affected by the downward trend, manufacturers in northern Shandong are relatively cautious and mostly maintain their current sales levels. However, shipments in the Hebei region proceeded smoothly; due to downstream restocking activities, there was no sales pressure, and prices increased by 30 yuan per ton. Given the current market conditions, most manufacturers are cautious and adjust their shipment prices according to their own circumstances. 　　Looking at the downstream market at present, demand for urea is limited, and prices have declined; thus, there is little support for the market ； Other downstream markets are performing averagely, and it is difficult for them to bring substantial benefits to the market ； Meanwhile, environmental inspections in the Tianjin-Beijing-Hebei region have already begun. Although there is no immediate impact on liquid ammonia production at present, it will affect the operating capacity of downstream products. Going forward, as environmental inspection efforts intensify, there is an expectation of a decline in consumption at the downstream end. If production in the synthetic ammonia market also decreases, prices might remain stable within a range of fluctuations ； However, if the supply of synthetic ammonia remains unchanged while the operating load downstream decreases, the market is likely to decline. 　　It appears that the main concerns in the market at present are changes in the export volume of liquid ammonia, as well as the impact of environmental inspections on the operating capacity of downstream products. Businesses should remain cautious in recent times and avoid following others blindly, which could lead to unnecessary losses. (Yuan Ning)