Central environmental inspection team arrives in Shandong – Analysis of its impact on the liquid ammonia market

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Central environmental inspection team arrives in Shandong; analysis of its impact on the liquid ammonia market Author/Source: JinYinDao Date: 10-10-2016 Clicks: 8 In October, the second batch of central environmental inspection teams arrived in Shandong to carry out environmental inspections. The environmental protection team first went to southern Shandong; during the National Day holiday, some liquid ammonia manufacturers in that region stopped operations. On the first day after the holiday, some liquid ammonia manufacturers in Linyi were still shut down for maintenance. Linyi’s export volume of liquid ammonia has decreased by around 500 tons, and purchases from downstream customers are shifting to northern Jiangsu. On the first day after the holiday, prices in the liquid ammonia market in northern Jiangsu rose by 40 yuan per ton, with the prevailing selling price ranging from 2170 to 2200 yuan per ton. 　　According to JinYinDao’s monitoring, only a small portion of enterprises have been forced to suspend operations due to environmental inspections at present. Some large factories in northern Shandong are continuing to operate and ship products as usual, without being affected by these environmental inspections. As can be seen from the export volume comparison table, the export volume of liquid ammonia in the East China region has increased, while that in Shandong has decreased. The reason for the decline in exports is not only the shutdown of the Linyi plant due to environmental inspections, but also routine maintenance by some manufacturers in northern Shandong ； Sales of environmentally friendly liquid ammonia for parking purposes in the Linyi area have decreased by around 500 tons. The additional drop in sales is due to routine maintenance work carried out by some enterprises in northern Shandong, and sales are expected to recover in the short term. 　　　http://img8.fert.cn/image/20161010/20161010083849864986.png It is understood that the manufacturing facilities in northern Shandong generally meet the required standards, so no widespread shutdowns will occur even if environmental inspection teams come to check. Therefore, environmental inspections have little impact on the supply volume of liquid ammonia. Therefore, with the arrival of environmental inspections, there will be no shortage of liquid ammonia. 　　Furthermore, looking at the downstream products of liquid ammonia in the agricultural sector, the markets for urea, compound fertilizers, and phosphatic fertilizers are currently in a off-season period. The urea market is relatively calm, while those for compound fertilizers and phosphatic fertilizers have entered this off-season phase, resulting in reduced production levels; the decline in production in the compound fertilizer market is particularly noticeable, with some plants in Shandong and Hebei having stopped operations for maintenance. Therefore, environmental inspections have little impact on the demand in liquid ammonia agriculture; they only make the off-season even quieter. As for chemical products, demand remained modest, while the acrylonitrile market stayed relatively strong, providing support for the market ； The caprolactam market remains relatively weak and unable to support the market. 　　It can be seen that the arrival of environmental inspection teams in Shandong has little impact on the liquid ammonia market. Although supply is currently low in southern Shandong, there is an ample supply from areas such as northern Jiangsu, which can meet the market’s needs.