This week (7.13-17), the domestic trend of liquid ammonia was weak, with prices mainly falling. The weekly decline of liquid ammonia in Shandong region was 2.55%. The market operation logic is that high downstream urea inventory dragged down demand, coal prices slightly bottomed out, and regional supply differentiation brought about local price differences. At present, the mainstream price of liquid ammonia in Shandong region is between 2100-2300 yuan/ton.
Supply side: Overall loose, regional differentiation, local production reduction provides bottom support
Firstly, the overall operating rate of liquid ammonia in the country is relatively high, with less maintenance of coal production facilities and concentrated resumption of production of pre shutdown facilities. The overall supply of commercial ammonia is sufficient; However, the proportion of self use ammonia in integrated urea enterprises has increased, resulting in a decrease in the export of liquid ammonia and a contraction in market circulation.
Secondly, there is significant regional differentiation: some ammonia companies in Hebei and Shandong have reduced production to maintain prices due to fluctuating cost lines, and their export sources have tightened over the weekend. Manufacturers have proactively raised their prices, but the intensity is not significant, within a hundred yuan; The independent ammonia plants in Shanxi and Henan have sufficient export sources, and their quotations continue to weaken at low levels, leading to a widening regional price difference.

Thirdly, the cost advantage of gas head is limited: domestic natural gas prices are stable, and the cost of gas head ammonia is 1500-1600 yuan/ton, but the proportion of gas head production capacity is low, making it difficult to reverse the overall loose pattern.
Demand side: Continuous high inventory of downstream urea, sluggish terminal procurement
From the demand side, the urea industry continues to operate at high loads, with a production rate of nearly 90%, and the market has entered a period of accumulation. Weak agricultural demand: sporadic procurement of fertilizers downstream, and the impact of rainy weather in the south on fertilizer supplementation and use; The operating rate of downstream industrial compound fertilizers is less than 30%, and the purchase of liquid ammonia raw materials is done in small quantities according to demand, without centralized replenishment. Industrial chain transmission effect: Urea spot prices have continued to decline this week. According to the Commodity Analysis System of Shengyi Society, as of July 17th, Shandong urea has fallen to the range of 1770 yuan/ton, with a weekly decline of 1.73%. The profit of urea factories is compressed, and they actively reduce the purchase of ammonia products from external sources, prioritizing the consumption of self-produced liquid ammonia. The demand for the circulation of ammonia products is significantly reduced, suppressing the upward space for ammonia prices..
Market forecast:
Analysts believe that liquid ammonia may remain stagnant in the short term, and the market is prone to decline but difficult to rise. On the one hand, there has been little change in equipment recently, and the supply pattern remains relatively abundant. On the other hand, there is not much positive news on the demand side, with weak agricultural demand and limited replenishment. On the other hand, high urea inventory has forced ammonia companies to switch to high levels of ammonia. The market purchases according to demand, with industrial essential needs being the main focus. The supply and demand of materials continue to be weak, which restricts the ammonia market from moving towards a positive trend.