In August, the domestic liquid ammonia market fell sharply, especially in the latter ten days. According to the monitoring of business society, the liquid ammonia fell by 21.16% in the whole month of August, mainly due to the increase of market supply and the high inventory of manufacturers. In the case of low demand, the market was forced to reduce prices and arrange inventory, and the market continued to fall.

In August, the supply of liquid ammonia was abundant, especially in the middle and late ten days. With the resumption of maintenance units, the supply pressure increased sharply. Previously, under the influence of enterprise maintenance and domestic shortage, liquid ammonia experienced a soaring market in mid and late July. However, it did not last long. Since the end of July, the price of liquid ammonia continued to fall, and the market fell in August. On the one hand, the epidemic has led to poor traffic and inventory backlog. On the other hand, the high opening rate of enterprises has led to a surge in output. Without any favorable demand, liquid ammonia fell again and again. By the end of the month, the domestic market price of liquid ammonia was 3400-3800 yuan / ton.

On the cost side, liquid ammonia deviates from the upstream coal market. Due to the increase of cost pressure and the downward impact of liquid ammonia price, the profits of ammonia enterprises have shrunk sharply, and now they are hovering on the edge of loss. The domestic coal market continues to be hot. According to the monitoring of the business community, the power coal began to develop in the last ten days. From August 19 to 31, the power coal increased by 8.21%. At present, the power coal price has exceeded the 1100 yuan / ton mark（ (see figure above)

From the supply side, in early August, liquid ammonia was still at a high level, but the manufacturer has entered the accumulation period. In the middle and late ten days, domestic ammonia enterprises ushered in the centralized production resumption period. Previously, many sets of units were overhauled all over the country. The production resumption of units in the maintenance period was started in Shandong, Hebei, Ningxia, Anhui, Hubei and other regions, and the market supply increased significantly. More importantly, in the early July, affected by the domestic epidemic, the traffic was poor, the shipment of ammonia enterprises decreased, and the manufacturer’s inventory was generally high. The continuous high volume of ammonia enterprises forced the price of liquid ammonia to fall again and again, with a decline of more than 500 yuan / ton per week on the 27th.

On the demand side, urea also came out of the shock and decline in August. In particular, it continued to decline in the middle and late August. According to the monitoring of business society, urea fell by 13.43% in the whole month. Weak demand side is the main reason for the decline of urea. After entering August, the domestic agricultural demand for urea has basically ended, the procurement has slowed down, and the increment of industrial demand is also insufficient. The recession on the demand side has led to the continuous accumulation of industrial inventory, the continuous price reduction of manufacturers and the pessimistic downward market.

In the future, the pressure on domestic ammonia supply is still obvious, but at present, the price is at a low level. At the end of the month, ammonia enterprises have stopped falling and stabilized, and some enterprises raise their quotations. Moreover, the upstream cost surged, the pressure on enterprises increased significantly, the downstream space was insufficient in the later stage, and there was rebound demand in the market. However, from the demand side, it is expected that the seasonal increment space of compound fertilizer in September is limited, and the agricultural and industrial needs will still be weak. Therefore, it is expected that the liquid ammonia market will still be difficult to improve greatly, mainly rebounding slightly.