Industry News
After some adjustments, the ammonia market may stabilize and experience a strong upward trend
So the reversal of the ammonia market is mainly due to a sudden decrease in supply. The short-term agricultural demand support on the demand side is still relatively limited, and winter storage has not been significantly started yet. The urea market is also paying more attention to the procurement progress in the Northeast region, and industrial demand is relatively stable. Although some nitric acid factories are expected to recover, for the ammonia market, it is mostly co production, which also reduces the supply of commodity ammonia from multiple aspects. Next, let's take a detailed look at the recent changes and trends in the supply side.
According to statistics, as of October 18th, the amount of commodity ammonia in the main production area reached 21900 tons, a sharp decrease of 11% from last week's high level of 24600 tons, and the daily commodity volume decreased by 2700 tons. The significant reduction in the amount of commodity ammonia, on the one hand, considering the significant relief of factory inventory pressure after the holiday, the liquid level has basically dropped to a low level; On the other hand, maintenance, production restrictions, malfunctions, etc. have led to continuous tightening of the supply side. Since last week, the shutdown and maintenance of Fujian Wanhua Plant, the shutdown of downstream supporting facilities of Fujian Shenyuan, the maintenance of Shikefeng, the production restriction in Jincheng, the internal adjustment of Hualu, the shutdown of Runjin, and the failure of the alliance have caused a sudden decrease in ammonia production in a short period of time.
Although some factories, such as Wanhua, Runjin, and Lianmeng, are expected to recover their inventory, Hualu Jingzhou is expected to store and ship goods to the market, and even if the recovery increment is around 2200 tons. But at the same time, the nitric acid plants in Riyue and Shandong Hongda will resume operation, and the export volume will be reduced. On the 20th, Hualu urea will be restored, downstream supporting facilities such as Luxi nitric acid will be increased, Jincheng production restriction will continue, and Shanxi Jiyang, Huaxin, and Longmen will gradually undergo maintenance. The ammonia production will be reduced by 2500 tons. Overall, the supply is showing a tightening trend. However, if Jingzhou fails to ship smoothly, the overall market will continue to tighten in supply. This has also increased the upward confidence of ammonia companies.
However, in the medium to long term, there is still a bearish atmosphere in the ammonia market, especially considering the smooth increase in shipments from Jingzhou, Hubei and the resumption of shipments from Henan Jindi Equipment. Without other unexpected reduction situations, the supply will also be abundant in the future.
The recent positive support is also driven by exports. In the short term, the international ammonia price is still high and the market is mainly strong. Although considering the restart of Saudi Arabia's early maintenance ammonia enterprises, there will not be full production or spot production in the short term. Therefore, although the international ammonia continues to rise limited, the market will continue to be strong in the short term. According to calculations, the current theoretical arrival of China's imported ammonia at port is about 4600 yuan/ton, so import arbitrage will not continue to reverse, and exports are still favorable.
From multiple perspectives, the short-term upward momentum of the ammonia market is relatively strong, but in the current market atmosphere, the market trend is becoming fierce, and downstream fear of heights is gradually showing. The upstream and downstream game still exists, after all, some expected increases and decreases have not been fulfilled, and the increase in demand on the market is relatively limited, with occasional increases and decreases in some areas. Overall, the short-term positive trend in the ammonia market is inevitable, as some new orders are still acceptable. The market atmosphere for tomorrow's market increase of up to 100-200 yuan is gradually showing on the market. Therefore, from a downstream perspective, although there is an expectation of an upward trend in the future market, with the downstream trend of wait-and-see, the market may stabilize after some adjustments, waiting for new market signals to guide the market.
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