In May, the domestic liquid ammonia market continued the market of last month and continued to fluctuate downward. According to the monitoring of the business association, since May, for example, in Shandong Province, the price of liquid ammonia has dropped by 5%. The continuous downward trend of the price of liquid ammonia is mainly due to the result of the game between high inventory and low demand. Under the pressure of the manufacturers, the factory price has been lowered repeatedly, and the market offers have been lower. The range is 200-400 yuan / ton, and the market offer is 2500-2700 yuan / ton near the end of the month.

Shandong and Hebei, the main producing areas, showed a significant decline. On the one hand, when the market enters may, under the background of weak demand, the high start-up rate has increased the pressure on the manufacturers’ inventory. According to statistics, the start-up rate of liquid ammonia manufacturers in May is still around 80%. Due to the influence of spring ploughing season in the early stage, the demand for liquid ammonia in China has increased sharply, and the market delivery situation is naturally smooth. Compared with other chemical products, liquid ammonia has stepped out of an independent upward market. However, with the end of the peak season, the market returns to calm, and the downstream procurement shrinks, leading to the gradual accumulation of liquid ammonia in the manufacturers. At present, the amount of ammonia in Shandong, Hebei, Henan and other regions has been too high. Therefore, it is inevitable for the enterprises to reduce the price and inventory, and there are also enterprises to switch to urea to reduce the inventory pressure.

In May, the downstream demand of liquid ammonia also declined significantly, and it is in the off-season of fertilizer at present. Specifically, the operating rate of compound fertilizer enterprises this week is generally below 50%. Since April, the operating rate has dropped again and again, which is basically the same as last year. As a rule, the domestic demand of phosphate fertilizer market ended in April and may, enterprises rely more on the boost of export, and the demand for liquid ammonia is still relatively stable. But this year, affected by the overseas epidemic, the export orders have shrunk, and the inventory of enterprises has been under pressure, and the phosphate fertilizer enterprises have changed to produce compound fertilizer, further weakening the demand for liquid ammonia. In May, the downstream monoammonium phosphate (- 4.03%) and diammonium phosphate (- 1.29%) all decreased in varying degrees (as shown in the figure above).

In the future, the business community believes that the current supply pressure is large, and the peak season has passed, the demand is low, and the imbalance between supply and demand leads to the market entering a relatively empty window period. However, with the limited production of the enterprise, the inventory will continue to be destocked, and the contradiction between supply and demand will gradually ease. It is expected that the price will still be under pressure in the short term. In the medium term, with the alleviation of the contradiction between supply and demand, the liquid ammonia market will return to temperature.