In June, the price of domestic liquid ammonia fell by 9.74% on the whole. Prices in Shandong, Shanxi, Hebei, Henan and Hubei all fell to varying degrees, with a decline range of more than 500 yuan / ton. The market supply has changed, and the ammonia supply has increased. However, the demand for fertilizer in the downstream is weak, and the resistance to high prices has further suppressed some rigid demand. Lower downstream prices, terminal prices have also declined. According to the monitoring of business agency, as of June 30, the mainstream quotation range of liquid ammonia in Shandong is 4500-4750 yuan / ton.
Supply side
On the supply side, this month, the overall ammonia release in many places in China generally increased compared with last month, and the overall supply pressure increased. The price of urea retreated, and the manufacturer’s profit was poor, resulting in the reduction of the unit’s conversion to urea. Recently, ammonia is still recovering. Therefore, the overall supply of liquid ammonia surged, and the short-term surge in supply led to some excess.
Cost side
The price of the upstream coal market retreated, with a decline of 0.87% this month. The price gradually moved higher and began to squeeze the downstream profits. At the same time, the national regulation of coal prices is still within a reasonable range, and the downstream cost pressure is not large. At present, the profits of downstream methanol and liquid ammonia manufacturers are still within a reasonable range. Natural gas prices also fell this month, easing the cost pressure of gas head enterprises. According to the monitoring of business agency, the increase of liquefied natural gas this month was 11.01%%.
Demand side
From the terminal point of view, the downstream demand for liquid ammonia is rigid and stable, with no increment. The mainstream market price of urea in China rose first and then fell this month. On the whole, according to the monitoring of business society, the monthly decline of urea was 4.62%. The urea price of rising chemical at the end of the month was 3070 yuan / ton, which was 130 yuan / ton lower than that at the beginning of the month; The urea price of Hualu Hengsheng at the end of the month was 3065 yuan / ton, which was 75 yuan / ton lower than that at the beginning of the month; At the end of the month, the price of urea in Xiangcheng San’an was 3300 yuan / ton, which was temporarily stable compared with the beginning of the month. From the perspective of demand: the agricultural demand is general, and the industrial demand is mainly rigid. The agricultural demand in some areas is supplemented appropriately. The enterprises of compound fertilizer and rubber plate factories started work in general, and just needed to purchase. The price of melamine fell slightly, and their enthusiasm for urea procurement weakened. In terms of supply, some manufacturers plan to overhaul recently, and the daily output of urea has decreased slightly, resulting in a relatively insufficient supply.
From the above figure, the price comparison chart of urea and liquid ammonia shows that the trend of liquid ammonia and urea is basically the same. Recently, the price of liquid ammonia has fallen significantly, with a deeper decline than that of urea, and the price difference between the two has widened. But it is still at a reasonable level.
From the above figure, the profit of liquid ammonia industrial chain is still in a reasonable range. The price of natural gas in the upstream of the gas head has been declining, but the coal price has fallen under control. Affected by policies, the price is still under control, which is conducive to relieving the downstream cost pressure. Due to the weakening of seasonal demand, the middle and lower reaches, such as urea, fell, and the increase of compound fertilizers ammonium chloride and ammonium nitrate was limited, mostly controlled within 5%. In the later stage, the enterprise profits may meet the test, and the profits of liquid ammonia, urea and compound fertilizers may decline compared with the previous stage.
Aftermarket forecast
Business community believes that at present, the supply and demand environment of the domestic liquid ammonia market remains weak, and the supply pressure is expected to increase in the later stage. The previously overhauled devices may gradually resume operation in the later stage. In addition, the weakening of agricultural demand also brings bad news. Therefore, the price of liquid ammonia is still difficult to improve much in the short term.