Ammonium chloride prices estimated to stabilize in January
Release_time:2021-01-13 09:30:49 Source:original

Driven by the high urea prices, China’s ammonium chloride market was generally stable in early January, with relatively tight supply in the market. For example, the mainstream ex-factory price of ammonium chloride by wet process was 550-580 yuan/t in East China and Central China.  

First, the operating rate of sodium carbonate and ammonium chloride enterprises was low due to the required production cuts for environmental protection and insufficient raw material supply. The overall operating rate in the sector was about 56%, with a daily production of 30,000 tons. It is estimated that the operating rate of ammonium chloride enterprises will not pick up in the short term due to inadequate gas supply and tight coal supply.

Second, ammonium chloride enterprises have plenty of orders in hand waiting for shipment, and distributors or downstream users are cautious in placing new orders. Most ammonium chloride enterprises’ current orders will keep them busy until mid-January or before the Spring Festival (February 11), so some of them do not consider receiving new orders and some intend to raise prices. As the Spring Festival approaches, some small and medium-sized compound fertilizer enterprises or extruded granular ammonium chloride enterprises will lower their operating rate or halt production, so they will cut purchase of ammonium chloride, moreover, distributors remain cautious in placing orders and will only purchase when necessary.

Finally, the prices of urea are still at high levels despite of fluctuations in some regions, and the operating rate of urea enterprises in Southwest China is estimated to remain low as natural gas supply will not increase significantly. Both will help uphold the ammonium chloride market.

To sum up, ammonium chloride market is estimated to stabilize in the short term as the supply is limited and enterprises have plenty of orders awaiting delivery.