The price of liquid ammonia has exceeded 3,000 yuan per ton

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Since the last day of September, the liquid ammonia market has seen a sharp rise in prices, with increases of significant magnitude. In the Cangzhou area of Hebei, the reference price for liquid ammonia at the time of delivery increased by 210 yuan per ton, reaching around 2,880 yuan; in some areas of Shandong, the price rose by 170 yuan, reaching around 2,730–2,950 yuan. In Jiangsu, the price increased by 190 yuan, reaching around 3,080–3,100 yuan (for delivery on credit). In Anhui, the price rose by 100 yuan, reaching around 2,880–2,980 yuan (for delivery on credit). In the two Hubei provinces, the price increased by 50–150 yuan, reaching around 2,900–2,980 yuan (for delivery on credit) ； For manufacturers, while they are delighted by the rising prices, they also have significant concerns. If prices rise too high, there will be growing resistance from downstream customers; although purchases will continue, their enthusiasm will decline. Moreover, there is the risk that high prices will attract attention from competitors. If liquid ammonia prices keep soaring, some manufacturers may shift their focus from producing urea and methanol to liquid ammonia, which could lead to an increase in supply in the future and possibly a drop in prices ； Given the sharp rise in liquid ammonia prices, urea manufacturers have moved from hesitation to action. Based on the current trends and prices, they are far higher than in the same periods over the past years. As for the current mainstream prices of liquid ammonia in various markets, they are about 500-950 yuan higher than those in the same period last year, indicating a remarkable increase. Moreover, the prices of liquid ammonia at some manufacturers will continue to rise tomorrow ； Looking at the current price of urea, it is 400-500 yuan higher than the price during the same period last year, and this increase has also surprised the manufacturers. The factors contributing to such a large disparity in market conditions over these two years are mainly the following: First, environmental inspections have been more stringent this year than in previous years, and retroactive inspections are also common. As a result, the operating rates of liquid ammonia and urea manufacturers have remained low. Additionally, safety explosions and temporary equipment failures at some chemical plants this year (such as two plants in Hubei) have indirectly led to increased environmental oversight. The overall supply of liquid ammonia and urea is limited, and there are times when demand exceeds supply. Second is the support provided by the cost of raw coal. Since the beginning of this year, coal safety accidents and environmental regulations limiting production have led to a shortage in coal supply. Some manufacturers are facing shortages of raw materials, and coal prices continue to rise. For example, as of October 1st, the price of coal for one company increased by 70–75 yuan per ton. Although coal prices have dropped slightly in some areas recently, and they may fall further due to regulatory measures, the extent of such drops is likely to be limited. With heating starting up in most areas, the coal supply is likely to remain tight, and prices are likely to stay high. As a result, manufacturing companies continue to benefit from relatively high costs. Some manufacturers say that excessive price increases for liquid ammonia could lead to a short-lived period of prosperity. However, supported by the aforementioned favorable factors (low operating rates, low raw material costs), it is reasonable for liquid ammonia producers to raise prices. Moreover, with the upcoming *conference, fertilizer and chemical companies in Hebei and Shandong provinces will be affected to some extent, directly or indirectly; this will also impact the operating rates of liquid ammonia producers. For example, a liquid ammonia production facility in Cangzhou, Hebei, plans to carry out maintenance work before *, which could lead to further increases in liquid ammonia prices ； Compared to the overall urea market trend, prices have remained relatively stable. It is understood that today some manufacturers saw a slight increase in urea prices, but this was due to a reduction in the operating capacity of these manufacturers. In the past two days, it has been observed that there has been very little new demand for urea from distributors; only a small amount of additional orders were placed in some markets at the beginning of November. Most distributors and provincial agricultural supply companies express concern that urea prices might decline, and they are cautious, preferring to wait and observe before taking any action. In most regions, the price of liquid ammonia is moving towards 3,000 yuan, or even higher. According to manufacturers in some markets, the net profit from liquid ammonia is already above 200 yuan, and this profit level exceeds that of urea and methanol. Therefore, with a slowdown in the sales of urea, urea producers might be tempted to take action. However, it’s better to put plans into practice; adjusting production priorities accordingly is a wise choice. As reported from the market, some manufacturers have already taken action to ensure that both products can achieve their optimal performance levels.