Since this year, the ammonium nitrate Market has been in a downturn and prices have fallen to a new low in recent years. As prices have fallen below the cost line of many enterprises and inventory of enterprises and downstream users has been declining, prices have gradually stabilized since the second quarter. However, although the growth rate of production capacity has slowed down and the potential of agricultural demand is great, the situation of excess capacity of ammonium nitrate is difficult to resolve in the short term, and it is a little difficult for the market to recover. Mainly based on the following reasons.

In terms of production, parking and withdrawal capacity increased. According to the data from Nitrogen Fertilizer Association, 500,000 tons of production capacity have been withdrawn from 2014 to 2015, and 685,000 tons of production have been parked in 2016. It is estimated that less than 1 million tons of nitric acid and 800,000 tons of ammonium nitrate will be added. According to the 13th Five-Year Development Guidelines for Ammonium Nitrate, 2 million tons of backward production capacity of nitric acid such as atmospheric pressure method and comprehensive method should be eliminated in the next five years, and 2 million tons of backward production capacity of ammonium nitrate such as atmospheric pressure method should be eliminated. By 2020, nitric acid production capacity will be controlled at 21.5 million tons, and ammonium nitrate production capacity will be controlled at 13 million tons. Overcapacity of ammonium nitrate will gradually ease in the future, so it is unlikely that prices will continue to fall.

In terms of raw material price, coal is the main raw material for nitric acid and ammonium nitrate production, and anthracite accounts for a large proportion. The proportion of nitric acid and ammonium nitrate from anthracite is about 50% and 37%. Beginning in March, with the coal capacity removed, the price of raw coal for ammonia synthesis began to stabilize, and the space for the price of raw coal to fall in the future has been limited.

From the point of market demand, the demand of ammonium nitrate is mainly in agriculture and civil explosion, which accounts for 60% of the total ammonium nitrate. Although the demand for ammonium nitrate for explosives in infrastructure, mining, coal and other fields is shrinking, which makes it difficult for the demand for ammonium nitrate to recover from civil explosions, the development of water and fertilizer integration will promote the demand for nitrate nitrogen and provide new opportunities for the development of ammonium nitrate and downstream products.

Therefore, although the current market is not good, there are certain opportunities for enterprises to face positively, overcome difficulties and accelerate the transformation and development of the industry: first, to actively adjust the product structure; second, to innovate marketing models, strengthen agrochemical services, improve user recognition of nitro fertilizers, expand and cultivate customer groups and marketing channels; third, to strengthen industry self-discipline, avoid vicious competition in domestic prices. Competition does not harm the interests of industries and users; fourth, we should strengthen international trade and market development.