That’s how capricious ammonia synthesis is”

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Synthetic ammonia is truly “capricious” Author/Source: Date: 2016-12-22 Clicks: 58 The synthetic ammonia market has experienced frequent fluctuations; after a sharp rise in November, the market began to decline in December. Furthermore, on December 17th and 18th, the local market saw a decline of more than 100 yuan per ton. Why has synthetic ammonia become so “capricious” in just one month? The trigger for ammonia synthesis’s such volatility is changes in export volumes. The sharp rise in the early stage was driven, on the one hand, by rising costs, and on the other hand, by a decline in exports. The decline in export volume is reflected, on the one hand, in the unstable operation of some plants, resulting in reduced production ； On the other hand, rising prices of methanol and urea led some manufacturers to reduce ammonia production, increase methanol production, and boost urea output, resulting in a decrease in exports. The recent significant drop in synthetic ammonia production over the past two days is also closely related to export volumes. Firstly, environmental inspections are currently stringent; such inspections are particularly strict in parts of Shandong, Hebei, and the Two Lakes regions. As a result, some manufacturers have reduced their urea production, which has led to an increase in the export volume of liquid ammonia. At present, Shandong’s overall daily export volume of liquid ammonia exceeds 3,000 tons, with some manufacturers seeing their export volumes double compared to earlier periods. However, environmental inspections also caused other downstream factories to reduce production; as exports increased, demand declined accordingly. The supply-demand balance in China’s ammonia synthesis market has been disrupted, with an oversupply issue resurfacing; prices in Shandong have declined, and this has had an impact on surrounding areas through a chain reaction. Secondly, most ammonia synthesis plants in the country are currently operating normally; those that were shut down in November have largely returned to normal operation, resulting in a noticeable increase in market supply. Once again, looking at downstream products, the overall operating capacity in the fertilizer sector is low; compound fertilizers and phosphate fertilizers are also affected by environmental regulations that limit production. Demand in the industrial sector is weak as well. Although the price of caprolactam has risen significantly, the supply is limited, resulting in weak demand for liquid ammonia. It is evident that the downward risks in the synthetic ammonia market remain in the near term. At present, only the export volume in Shandong region has seen a significant increase; in the future, the export volumes in regions affected by environmental regulations will also be impacted. Therefore, to avoid risks during the \"crazy\" period in ammonia synthesis, industry professionals should pay attention to changes in a company’s export volume.