In 2024, the domestic liquid ammonia market experienced weak supply and demand, with prices fluctuating downward overall. According to monitoring by Shengyi Society, as of December 31, the annual decline in liquid ammonia in Shandong region was 28.98%.

Let’s take a closer look at the annual trend of liquid ammonia:

From January to early February, the price of liquid ammonia fell sharply, reaching a high of 3600 yuan/ton at the beginning of the month, which was the highest point of the year. The market has undergone a transition from tight supply to loose supply. After experiencing the impact of reduced production caused by environmental inspections at the end of 2023, the supply and demand of liquid ammonia gradually recovered. In January, collective resumption of work and high operating rates led to a large-scale surplus of ammonia supply in the market. Overlay, the conversion of urea to liquid ammonia in co production enterprises has led to a short-term surge in ammonia production. Due to a decrease in downstream procurement, the amount of ammonia released by large factories has increased. Supply pressure continues to rise, manufacturers are lowering prices and shipping, and the market is generally falling. At this stage, the ammonia market fell by over a thousand yuan, which was also the largest decline of the year.

From mid February to mid May, the market entered a period of repeated oscillation, and in mid February, the price of ammonia rebounded, mainly due to the tight supply performance in the main northern production areas. Part of the equipment in the northern region is undergoing maintenance, and the rainy and snowy weather in some areas is affecting supply, resulting in a tight market supply in the short term. There is a common phenomenon of vehicles queuing up for goods in production enterprises. Returning after the holiday, downstream procurement has also recovered, and the combination of the two has led to a significant rebound in the ammonia market. In April, the ammonia market experienced a pullback due to the resumption of production and poor exports. Entering May, downstream demand in the market improved, and the delayed peak season for agricultural demand brought about a rebound in the ammonia market.

In June and July, the market was mainly volatile and downward, mainly due to high inventory pressure on enterprises. In order to alleviate the pressure, factory prices continued 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. Due to the lack of support from downstream industries such as urea and compound fertilizers, all products have experienced a decline.

From August to the fourth quarter, the ammonia market continued to fluctuate within a range, with the amplitude mainly narrowing. The approximate range is between 2500-2800 yuan per unit. The market has experienced a sluggish market during the peak season of “Golden September and Silver October”. The price did not fluctuate significantly and remained in a stable market under the pull of supply and demand. Except for partial equipment maintenance, there is not much news in the market that has a significant impact on the market. The volatile market continued until the end of the year.

Outlook for 2025

Supply side: As we enter 2025, the oversupply of liquid ammonia may become even more severe. More than 5 million tons of new facilities are planned to be put into operation in China in the next year. Considering the current weak ammonia market situation and the issue of production willingness, some facilities may be delayed in production, but the market still faces the risk of oversupply.

Demand side: The growth point of downstream demand for synthetic ammonia in the future will still mainly focus on the agricultural demand port, with moderate growth in industrial demand as the main driver. The main demand growth point is still in the urea field. In addition, there will also be some growth potential in industrial fields such as soda ash, acrylonitrile, and caprolactam. However, there may be insufficient growth in demand for monoammonium phosphate and diammonium phosphate. Overall, the demand for liquid ammonia will continue to increase in 2025, but the growth rate may slow down.

Overall, it is expected that the ammonia market will face a relatively severe environment in 2025, with the crisis of oversupply not yet resolved, prices may be constrained by oversupply, and corporate profits will also face challenges. The expected price will be lower than the base price in 2024.