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An additional 4.9747 million tons are expected! 2021: Four Key Points Concerning China’s Synthetic Ammonia Production Author/Source: Refining & Chemical Industry Updates Date: 2021-01-29 Clicks: 26 Additional production expected at 4.9747 million tons! Four key highlights regarding China’s synthetic ammonia production in 2021: 1. The expected increase in China’s synthetic ammonia production in 2021 is 4.9747 million tons, with the growth rate reaching 8% for the first time since the 13th Five-Year Plan period. Since the 13th Five-Year Plan, the Ministry of Industry and Information Technology has required key industries to phase out outdated and excess production capacity, with at least 10 million tons to be eliminated in the synthetic ammonia industry. Over the past five years, the production capacity of synthetic ammonia in China has been declining year by year. Coupled with the impact of policies such as moving industries out of cities and into industrial parks, significant reductions in production capacity have taken place in China’s synthetic ammonia industry; alone in November, more than 2 million tons of outdated production capacity was phased out. In 2020, the national production capacity for synthetic ammonia was 67.43 million tons, representing a 4% decline compared to the previous year. Due to the continuous tightening of production capacity, the average trading price of synthetic ammonia in China has been rising year by year. The upward trend in the ammonia market became particularly evident after 2016, and the \"gas shortage\" during the period from 2017 to 2018 further boosted the ammonia market. In 2018, the average trading price reached its highest level of 3,076 yuan per ton, representing a 49.33% increase compared to 2016. However, starting in 2019, as some enterprises carrying out technological upgrades began operations, the gas shortage eased and the number of imported storage areas increased, the ammonia market began to decline. Although there was still some capacity being phased out in 2020, the impact of the pandemic caused prices in the ammonia market to remain low throughout the first half of the year, thereby reducing the average trading price. The average trading price in 2020 was 2,593 yuan per ton, a decrease of 10.03% on a year-on-year basis. http://img.yf116.cn/image/img/20210129/94573510789.jpg 2. In 2021, China’s production of synthetic ammonia is expected to reach 52 million tons, representing a growth rate of 4.97%. In 2020, China’s synthetic ammonia production was 49.54 million tons, a decrease of 9.01 million tons compared to 2015, representing a decline of 15.38%; the average annual growth rate was -3.11% ； During the same period, the annual average price increased by 306 yuan per ton compared to 2015, representing a growth rate of 13.4%, with an average annual growth rate of 3.65%. Looking at changes in annual production, since the 13th Five-Year Plan period, due to environmental regulations restricting production and the elimination of outdated manufacturing capacity, the operation level of ammonia synthesis plants has remained low, with production levels declining year by year. Between 2015 and 2018, production dropped sharply, reaching its lowest level of 46.12 million tons in 2018; the highest production level was 58.55 million tons in 2015, resulting in an average annual decline rate of -762%. However, during 2019–2020, due to the poor market conditions for methanol, many companies in this sector focused on ammonia production. Moreover, with the continuous occurrence of public health crises during that period, and considering factors such as stockpiling, once the epidemic was brought under control in the second half of the year, production rates across various industries remained high, and capacity was released through replacement processes. As a result, the ammonia production industry saw high levels of activity in 2020, with an increase in output as well. 3. China’s imports are expected to rise to 1.3 million tons in 2021, an increase of 13.4%. In 2020, the domestic import volume of synthetic ammonia was 1.1538 million tons, an increase of 0.7538 million tons compared to 2015, representing a growth rate of 190.26%; the average annual growth rate was 25.65%. During the same period, the annual average price increased by 306 yuan per ton compared to 2015, representing a growth rate of 13.4%, with an average annual growth rate of 3.65%. During the period from 2015 to 2020, my country’s import volume increased year by year. The main reason for this was that, due to policies such as the phasing out of outdated production capacity and measures aimed at environmental protection, energy conservation, and emission reduction implemented since China’s 13th Five-Year Plan, production capacity and output in the country continued to decline. As a result, domestic ammonia prices rose steadily, and the supply-demand gap widened. 4. In 2021, China’s demand is expected to be around 53 million tons, an increase of about 2.6 million tons compared to 2020, representing a growth rate of 5.15%. Affected by the regular environmental and safety inspections carried out in various regions since the 13th Five-Year Plan period, the closure of some small chemical enterprises downstream, and a number of other negative factors, consumption levels declined significantly. However, between 2019 and 2020, the apparent consumption of synthetic ammonia saw a rebound. This was mainly due to the continuous release of capacity in the nitrogen fertilizer industry, as well as the release of capacity to meet certain industrial demands, which led to an increase in overall consumption in this sector. In 2020, the apparent consumption of synthetic ammonia was 50.69 million tons, representing a 7.74% increase compared to 2018, with an average growth rate of 3.81%.