Industry News
Alleviating the supply-demand contradiction in the ammonium chloride market and improving the industry's mentality
Urea prices are constantly decreasing, and some in Shandong have seen an increase in decline, but overall they still remain at a high level. The price drop in the distribution market is also significant, and there is a strong resistance, making it inevitable that the market has a price but no market. According to statistics from Zhongfei.com, as of yesterday, the mainstream factory quotation for urea in Hebei region was around 2450-2470 yuan/ton, while the factory quotation for urea in Northeast region was 2450-2558 yuan/ton. Compound fertilizer factories in Linyi region of Shandong province have a low attitude towards receiving urea, with a receiving price of 2400 yuan/ton. The wholesale price of local small particle urea in Jiangsu province has dropped to 2470 yuan/ton; Urea and ammonium chloride fluctuate one by one. For example, the mainstream factory quotation for dry ammonium in Tianjin has increased to 700-720 yuan/ton, while the mainstream factory quotation for dry ammonium in East China is around 630-650 yuan/ton, and the high-end price is 700 yuan/ton. The higher or lower is obvious. The low price advantage of ammonium chloride is obvious, and the recent trend of urea and ammonium chloride should be considered based on domestic supply and demand, policies, and exports.
Firstly, there are different opinions on whether urea can be exported, but from the perspective of domestic policies to ensure supply and stable prices, as well as the results of labeling, the short-term constraints on the rise of domestic urea prices are evident; In addition, there has been a recent backflow of urea in some ports, which has weakened the mentality and atmosphere of the domestic market. Secondly, there is also a certain contradiction between the supply and demand of urea in China. With the production of new urea production capacity, the supply of urea has increased. According to statistics from China Fertilizer Network, the total daily production is about 182000 tons. In the long run, if the production limit in Jincheng, Shanxi Province ends, there will be a significant increase in daily production; The demand for urea is average again, and the agricultural market purchases according to demand. The high demand for urea has led to low reserve enthusiasm among large and medium-sized traders, who operate cautiously. However, the overall operation of compound fertilizer plants is only about 38%. Although the price of finished fertilizer has skyrocketed, the sales progress is slow, and the price of ammonium chloride is also low, indicating a certain substitution for urea. Overall, the urea market is constantly changing, and the market should be cautious and purchase according to demand or be more stable. In the later stage, attention should also be paid to the export quantity, policies, and when domestic light storage enterprises will start to undertake storage.
The high price of urea provides support for the upward mindset and industry atmosphere of ammonium chloride enterprises. In addition, there have been recent changes in the supply and demand of ammonium chloride. Recently, some ammonium chloride enterprises have temporarily stopped production, resulting in a decrease in supply and inventory pressure. According to statistics from China Fertilizer Network, the overall industry operating rate of Lian Alkali Enterprises is about 84.3%. After the completion of enterprise maintenance and the full operation of new production capacity devices, there is a risk of excess supply of ammonium chloride, and the pressure on supply is difficult to ignore; The price of the main product soda ash has significantly decreased, and there is still room for a decline. From the perspective of double ton cost and profit, it has increased the confidence of enterprises in boosting ammonium chloride; From a demand perspective, the price of ammonium chloride is relatively low and there is little operational risk, which has increased the enthusiasm for downstream pickup. Winter storage in the Northeast market has gradually started, with a large amount of goods taken. The sales of ammonium chloride are advancing, and production enterprises have sufficient orders to be issued in the near future.
Overall, the supply-demand contradiction in the ammonium chloride market has eased, and the industry's mentality has also improved relatively. There is room for price increases, but due to potential pressure on the supply side and downstream caution, the increase may be relatively limited. Although not particularly optimistic, there is no need to be overly pessimistic.
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