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Expanding liquid ammonia exports has become an urgent task. Author/Source: Date: 2016-08-23 Clicks: 49 The liquid ammonia market has remained sluggish since the beginning of this year, with only a slight rebound occurring in April and May; otherwise, prices have tended to fall. Especially since June, prices have continued to fall; currently, the ex-plant price of liquid ammonia is between 1,700 and 2,100 yuan per ton, marking the lowest level this year. Compared to the same period last year, the decline is over 15%, and compared to the price peaks in previous years, it is over 50%. The liquid ammonia market has performed poorly this year, due to two main reasons: first, there is a significant overcapacity. According to relevant statistical data, China’s current synthetic ammonia production capacity is 83 million tons, with an annual apparent consumption of around 58 million tons; thus, the overcapacity rate is over 30%. This year, due to poor market conditions, some high-cost ammonia synthesis plants were forced to shut down or reduce production, yet the overall output of ammonia remained high. According to **statistics bureau data, synthetic ammonia production in the first half of this year was 28.568 million tons, with a decline of only 0.65% on a year-on-year basis; thus, there was a significant surplus of supply in the market. Second, the sluggish urea market has **hindered the development of liquid ammonia**. Liquid ammonia is an intermediate product for urea; manufacturers can either sell it directly or process it further into urea for sale. The urea market has performed extremely poorly this year, with the mainstream ex-factory prices dropping below 1,200 yuan, returning to levels seen over 20 years ago. Not only is the price low, but it’s also difficult to sell. The liquid ammonia market is in a better situation; many urea manufacturers have increased their sales of liquid ammonia, and some have even stopped producing urea and focused solely on selling liquid ammonia. As a result, the supply of liquid ammonia in the market has surged, so it’s only natural that its price falls The main downstream industry for liquid ammonia is fertilizer production; it is also used in the chemical industry, mining and metallurgy, refrigeration, and power plant desulfurization and denitrification processes. Among these, over 50% of its consumption occurs in the fertilizer industry. The poor performance of the fertilizer industry means that it is difficult for the liquid ammonia market to achieve significant growth; even if demand from other downstream industries using liquid ammonia increases, the overall increase in demand for liquid ammonia will remain limited. The liquid ammonia market must find alternative paths and vigorously expand exports in order to reverse its unfavorable situation. At present, manufacturers do not pay enough attention to the export of liquid ammonia; exports are only occasional and far from being significant, so there is still great potential for growth. Countries in the surrounding region such as Thailand, Malaysia, the Philippines, and India are all major agricultural producers; they lack sufficient capacity for ammonia production. Moreover, they are located close to us, making them excellent markets that deserve significant effort to develop. **Customs data shows that in the first half of this year, China exported only 4,143 tons of liquid ammonia, a significant drop of 86% compared to the previous year, with exports amounting to 139 tons in June. The low volume of liquid ammonia exports this year came as a surprise to many people. Last year, China’s liquid ammonia exports improved, with a total export volume of 32,600 tons, representing a significant increase of 126.4% compared to 2014. This year, zero tariffs have been applied to the export of liquid ammonia; previously a tariff of 180 yuan was imposed. This means that by exporting at the same price, companies can increase their profits by around 9%. It was originally expected that China’s liquid ammonia exports would see a significant increase this year; yet, thanks to such favorable export policies, exports of liquid ammonia have actually declined sharply. It can only be said that companies do not pay enough attention to liquid ammonia exports, thereby wasting favorable policies needlessly. Market participants shook their heads and sighed. To expand the export of liquid ammonia, in addition to companies giving it due attention, it is also necessary to strengthen promotion in the international market. The experience of ammonium chloride in expanding into international markets is worth learning from by liquid ammonia manufacturers*. Previously, China’s exports of ammonium chloride were also low. As production capacity increased, manufacturers of ammonium chloride took the initiative to explore foreign markets, working closely with distributors in Southeast Asia and other regions to introduce the benefits of ammonium chloride to farmers, achieving very good results. Last year, China’s exports of ammonium chloride exceeded one million tons, and in the first half of this year exports reached 580,000 tons, setting another record high. Liquid ammonia manufacturers should also take the initiative to promote their products in the international market.