In July, the domestic liquid ammonia market continued its downward trend from June, with the decline worsening compared to the previous month. According to the monitoring of the commodity market analysis system of Shengyi Society, on July 31st, the cumulative decline in the main production area of Shandong this month was 12.80%. Manufacturers in Shandong have reduced their prices by over 300 yuan/ton this month. At present, the mainstream quotation for liquid ammonia in Shandong region is 2400-2700 yuan/ton.

On the raw material side, according to the monthly rise and fall chart of the liquid ammonia industry chain in Shengyi Society, the industry chain shows a pattern of more declines and less increases, with weaker middle and lower reaches. Upstream natural gas prices have risen. But the boosting effect on downstream liquid ammonia is limited. On the one hand, coal ammonia companies are still affected by low coal prices, and their profits are still acceptable. In order to ensure that shipping companies are still willing to lower prices to attract the market. According to the Commodity Market Analysis System of Shengyi Society, the decline of thermal coal this month is 0.32%. Overall, it creates a negative impact on the liquid ammonia market. At the same time, reflecting both supply and demand, the market still shows a relatively bearish trend.

On the supply side, there is high inventory pressure on enterprises, and in order to alleviate the pressure, factory prices continue to be lowered. On the one hand, as supply increases, manufacturers’ shipments slow down and inventory pressure rises. On the other hand, the large import volume and low-priced foreign sources have impacted the domestic market. Supply is in an oversupply situation. During the month, major factories in Shandong have repeatedly lowered the ex factory price of liquid ammonia by more than 300 yuan/ton.

From the demand side, downstream industries such as urea and compound fertilizers lack support, resulting in a decline in the overall product line. Urea and ammonium nitrate have experienced significant declines. According to monitoring, urea fell by 6.6% in July, and ammonium chloride fell by 8.27%. Downstream weakness has further exacerbated the supply-demand imbalance.

Market forecast: There will be little change in cost, especially in coal prices, which may continue to be weak. In the short term, the downstream urea and compound fertilizer market continues to be weak, and ammonia companies are nearing the end of destocking, which is expected to alleviate supply pressure in the near future. In the later stage, downstream agricultural demand will rebound, and the price of liquid ammonia will stop falling. In the later stage, it may gradually seek upward space.