In September, the domestic liquid ammonia rebounded at the bottom, the prices in many places in China increased significantly compared with the end of last year, the market supply and demand were tight, the operating rate fell due to excessive maintenance of liquid ammonia devices, the agricultural demand rebounded, and the psychology of buying up or not buying down made the trading volume rise moderately. According to the monitoring of the business community, as of September 13, the growth rate of liquid ammonia in Shandong was 7.5%, and the current mainstream quotation range was 3800-4100 yuan/ton.

 

PVA 1788 (PVA BP17)

Supply side

 

On the supply side, the supply of liquid ammonia in China has been tight recently. Although some domestic overhaul devices have recently resumed operation, most of the devices that have not been restored have increased their own use and reduced their export sales. On the premise of the start-up of downstream fertilizer plants, the supply is even more strained. Up to now, the units of Henan golden earth, Shandong Shikefeng, Wanhua Fujian unit, Hubei Heyuan and other large plants are still under maintenance. The continuous contraction of supply is the main reason for the rebound in prices.

 

Cost side

 

The generally high cost also helps liquid ammonia to rise. The market price of You Coal fluctuated and rose. As of September 13, steam coal has risen by 5.13% since September, and the price is still high. The profit of the downstream liquid ammonia is constantly squeezed. With the help of the slight start of the downstream demand, ammonia enterprises can only passively raise the price to ensure profits. However, the state regulates and controls coal prices, and the rise of coal is restrained to a certain extent. The profits of downstream methanol, liquid ammonia and other products are still within a reasonable range. Natural gas prices rose slightly in September, which also played a cost driving role for southwest gas head ammonia enterprises. According to the monitoring of the business community, LNG rose 1.66% this month.

 

Demand side

 

From the terminal point of view, the downstream demand of liquid ammonia has rebounded slightly. The price of urea continued to rise, and the urea rose 5.83% in September. The demand for downstream compound fertilizer in autumn has been followed up one after another, and the industrial demand has also improved. In addition to the promotion of export and light storage on the market, the price of urea has continued to rise, and the shipment performance is good. The downstream stock increased before the Mid Autumn Festival, and the demand increased slightly.

 

POLYVINYL ALCOHOL

From the above figure, we can see that the trend of liquid ammonia and urea is basically the same. In September, the price difference between the two narrowed significantly.

 

From the above figure and the liquid ammonia industry chain chart, the profit of the liquid ammonia industry chain is OK at present. The price of natural gas at the upstream of the gas head has not increased much, but the price of coal has increased significantly. In the later stage, coal may still have the power to move up, so the pressure of liquid ammonia and downstream or cost will increase. In terms of downstream products, urea (5.83%) showed strong performance, while other products such as ammonium chloride (- 14.85%), ammonium nitrate (- 4.61%), diammonium phosphate (- 4.6%) and other products showed weak performance..

 

Future forecast

 

The business community believes that, at present, the supply and demand pattern of the domestic liquid ammonia market has not changed much, both agricultural and industrial demand has grown moderately, and export demand has also been stimulated. However, with the resumption of production of devices in Guizhou, Chongqing and other places approaching, the supply is also expected to increase in the future. The negative supply will dilute the positive demand. From the perspective of the later part of the festival, ammonia enterprises have obviously slowed down their pace of inflation, and may face some upward pressure in the later period, but the market is still volatile and strong.

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