In May, the domestic liquid ammonia market continued the upward trend of the previous month and rose in shock. According to the monitoring of the business community, the liquid ammonia rose by 5.07% this month. At the end of the month, the mainstream transaction price of liquid ammonia in Shandong was 5100-5300 yuan / ton. It is mainly affected by the reduction of supply in the area and the shutdown of some units; As well as the high urea level in the downstream, the raw materials of compound fertilizer rose, and the demand maintained a moderate growth; In addition, there are still some enterprises switching to urea, which makes the supply of ammonia more tight. Superimposed on the downstream agricultural demand, the downstream stock also pushed up the ammonia price.
Supply side
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On the supply side, the supply of this month was basically flat. In April, the overall supply of liquid ammonia remained tight, especially in the northern region. The supply and demand were in tight balance for most of May. Xinlianxin, Luzhou, mingshengda, as well as black cat and Longmen and other sets will be overhauled within a month. The overall ammonia release in many places in China has shrunk. In addition, the start-up of downstream fertilizers of integrated enterprises is generally better than that of last month, the self consumption of manufacturers is increasing, and the export sales are shrinking.
Cost side
On the cost side, coal continued to be stable in May. Affected by the national policy control, the rise in coal prices has been generally suppressed. However, at present, the price is stabilizing, and the downstream mainly purchases on demand, and the overall supply remains stable; In terms of downstream power plants, the port market is now dominated by coal supplied by changxiehe. Now, the daily consumption of power plants is in the off-season, the purchase intention is general, the market transactions are limited, and they are resistant to high coal prices. The stabilization of coal price eased the cost pressure of downstream methanol, liquid ammonia and other coal chemical industries.
Demand side
On the demand side, the urea price this month continued its rise in April, with an expansion. According to the monitoring of the business community, the monthly increase of urea was 5.09%. The agricultural demand in Xinjiang and southern China is good, the demand of compound fertilizer enterprises is increasing, the plate factories purchase on demand, and the demand of urea industry is sufficient. Buy up but not down, urea trading atmosphere is good. From the perspective of supply: there were many urea maintenance manufacturers in May, and the supply decreased. Various factors continue to drive up urea prices. The policy of ensuring supply and stabilizing prices will remain unchanged. The mild growth of downstream demand is the main reason for the continuous rise of liquid ammonia price. However, in the future, the agricultural demand will be weakened, the demand of compound fertilizer enterprises will be general, the plate factories will purchase on demand, the downstream customers will have a strong wait-and-see attitude towards the high price urea, and the export will be restricted by the legal inspection process. The operators should be wary of the risk of the high price falling back in the later period.
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From the above figure, the price comparison chart of urea and liquid ammonia shows that the trends of liquid ammonia and urea are basically the same. In the middle and late May, the two curves are close, mainly because liquid ammonia is weaker than urea in the early stage, and urea falls in the late days, while ammonia prices are generally high, flattening the price difference between the two. At present, the price difference between the two is still at a relatively reasonable level.
According to the above figure, the profit of liquid ammonia industrial chain continues to improve, and the natural gas upstream of the gas head is sluggish, falling by more than 7% this month. In addition, affected by the policy, the coal price remained stable, the middle and lower reaches generally rose well, the cost was controlled, and the profit of liquid ammonia was significantly higher than that in the early stage. The downstream areas have also been significantly improved. Diammonium phosphate (12.24%), ammonium chloride (5.71%) and urea (5.09%) have increased significantly.
Aftermarket forecast
In the future, the business community believes that the supply of liquid ammonia in the domestic market may improve recently. Some units in Shandong are restored, and some may bring about supply increment. On the demand side, the demand for fertilizer weakens, and downstream procurement may slow down. On the cost side, coal is still affected by regulatory policies, and the price remains stable. In general, liquid ammonia runs to a historical high, and the future supply accumulation may be accompanied by a high callback risk.
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