In March 2024, the domestic liquid ammonia market fluctuated and rose strongly, continuing the upward trend of February at the beginning of the month, briefly declining in mid month, and continuing to rise in the latter half of the month, supported by tight supply. According to the Commodity Market Analysis System of Business Society, liquid ammonia recorded an increase of 11.5% in March.

At the beginning of the month, liquid ammonia continued its upward trend in February. The main reason is the tight supply performance of the main production areas in the north, which is beneficial to support the price increase. The maintenance of equipment in northern regions is relatively concentrated, and some areas are affected by weather, resulting in low inventory of manufacturers due to supply shortages. In addition, downstream procurement has also recovered, and the ammonia market has noticeably rebounded. Manufacturers have raised their prices multiple times, with a cumulative increase of over 300 yuan/ton in the first ten days. The dealer’s offer naturally skyrocketed.

After mid month, the market experienced a brief pullback, with prices falling from 3300 yuan to around 3000 yuan at the beginning of the month. The main reason is that there have been significant changes in the production of urea plants, with more liquid ammonia being transferred in northern regions, especially Shandong and Hebei, resulting in an increase in ammonia volume. In addition, central and eastern China have also successively reduced prices for shipments. The market has shifted from tight supply to short-term surplus. Manufacturers mainly reduce prices, with a reduction range of 300 yuan/ton.

In the latter half of the year, liquid ammonia rebounded again, and the overall operating rate of domestic manufacturers significantly declined, especially with the ammonia release in the main production areas in the north shrinking by more than 5% compared to mid month. The performance of ammonia production in the market is tight, with multiple units undergoing maintenance in Henan, Anhui, and Northeast China. There is a common phenomenon of vehicles queuing up for goods in production enterprises. The ex factory price of liquid ammonia has naturally been repeatedly raised. Shandong manufacturers have generally raised prices 2-3 times within the week, with a cumulative increase of 300-400 yuan/ton. The market performance is in short supply.

Future Market Forecast

According to analysts from Business Society, from a supply side perspective, the tight supply in the market has been alleviated with the commencement of some facilities, and prices have slightly stopped rising and fallen at the end of the month. It is expected that the supply will gradually stabilize in the later stage.

From the demand side, the agricultural gap period will continue until early April, and demand will be activated after mid April, which will continue to support the high level range of the ammonia market. Downstream demand needs to be followed up. The main focus of industrial demand is to maintain stable demand, and there is still some support for liquid ammonia in the future. From a cost perspective, especially coal fired ammonia enterprises, they may still be impacted by the weakness of coal, but the reduction of cost pressure will also provide more profit space for enterprises.

Taking all factors into consideration, the price of liquid ammonia will gradually stop rising and stabilize in the near future. In the short term, it is not ruled out that there is room for price decline due to the increase in supply. However, under the expectation of demand growth in mid to late April, the supply-demand game will intensify, and the ammonia market may still have a bright spot.