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The synthetic ammonia industry is in a difficult situation and may undergo restructuring. Author/Source: JinYinDao Fertilizer News. Date: 2016-08-12. Clicks: 29. The synthetic ammonia industry forms the basis of China’s fertilizer industry and is also an important part of traditional coal chemical manufacturing. At present, China’s synthetic ammonia production capacity exceeds 83 million tons, with apparent consumption within the year amounting to around 58 million tons; thus, the industry suffers from an overcapacity rate of over 30%. Most large-scale ammonia synthesis plants in the country are those that produce urea as a by-product, being used directly for urea production. The majority of the urea available on the market comes from plants with an annual production capacity of less than 200,000 tons, as well as from the surplus produced by nitrogen fertilizer manufacturers for their own use; this accounts for around 15% of the total volume. However, the urea market has remained sluggish this year; some companies have reduced their urea production while increasing exports of liquid ammonia, which has had a significant impact on an already oversupplied industry. Entering August, the synthetic ammonia market saw a continuous decline; the drop in the Jiangsu market was 6.71%, while those in Hebei and Shandong were 3.93% and 3.54% respectively. The continuous decline in the market poses challenges to the development of this industry; manufacturers are forced to sell at losses, demand is weak, and there is significant pressure on shipments. The ammonia synthesis industry still needs to find a way to overcome its difficulties on its own. How to achieve self-redemption remains something we must continue to explore. Firstly, from the supply side, it is necessary to control the volume and prevent further increases in production capacity, while phasing out outdated production facilities; at the same time, the demand for synthetic ammonia needs to maintain a certain rate of growth. Based on the proportion of demand from downstream sectors, urea is the main consumer; currently, there is also an overcapacity in urea production, so the increase in demand is limited. There is further room for an increase in demand for downstream chemical products such as acrylonitrile and caprolactam. From the perspective of production capacity, the focus should be on phasing out outdated capacity and upgrading it through capacity replacement. Furthermore, it is necessary to improve the structure of raw materials. Currently, natural gas prices are high, putting significant pressure on the production costs of companies that rely on gas as a fuel source. In the future, there should be a reduction in the number of such companies, with a shift toward those that use coal as a fuel source, in order to reduce their cost burdens. At the same time, it is necessary to improve environmental protection and energy-saving standards to ensure the healthy and orderly development of the ammonia synthesis industry, as well as to accelerate the transformation of business models. The ammonia synthesis market is currently characterized by a large number of small-scale producers, lacking the advantages that come with large-scale operations ； Furthermore, in accordance with the \"access requirements for the ammonia synthesis industry,\" some enterprises with smaller production capacities and outdated technology should be replaced. When demand is difficult to keep up with, the top priority should be to alleviate the pressure of overcapacity as soon as possible. In short, the ammonia synthesis industry is under pressure from both sides: demand for urea is low, so some companies have reduced their urea production and turned to exporting liquid ammonia, which puts additional strain on an already oversupplied liquid ammonia market. Therefore, if the ammonia production industry is to emerge from its difficulties, a reshuffle is inevitable, and it is urgent for companies to undergo transformation and upgrading. (Yuan Ning)