At the end of December 2025 ammonia prices declined by 3% compared to previous gains due to strong supply and poor downstream demand in China, which decreased buyer optimism. The prevention of price decline was attributed to tight domestic market availability through the middle of the month. However due to increasing inventory levels, disruption caused by weather and very little purchasing, the ammonia market weakened significantly.
In the first half of December 2025, Ammonia supply conditions remained relatively tight. Environmental protection measures in Henan led to reduced operating rates, while output in nearby Shanxi and Hebei also declined. These factors restricted availability and helped support price increases in North China.
Simultaneously, the prices of ammonia in Northwest China and Inner Mongolia rose due to the increase in ammonia prices in Hebei and Shanxi. While in Southwest China, the production of gas-to-ammonia conversion plants was slowed by ongoing equipment maintenance which caused price increases within this region but did not reach high levels due to lower production levels of ammonia using gas feed stocks.
In the first half of December, producers in Shandong raised the price of ammonia, which reflects a situation where market supply was insufficient to satisfy demand. During this time, there was increased trading activity due to both an increase in short-term restocking and reluctance on the part of downstream consumers to take too many risks.
The late December marks a significant change in the domestic liquid ammonia market as prices in Shandong province decreased week over week. The decrease of prices was due to a surplus of available material, slow overall trading activity and a weather disruption that impacted logistics within northern China.
Ammonia supply increased in the past week due to continued strong production levels from Shandong and Hebei Provinces. In addition, several plants in Central China resumed operations, adding further volumes to the market and intensifying oversupply pressures.
Transportation in the northern regions was restricted due to snowfall and rain, which resulted in higher inventories being held at the producer locations. In order to help move these inventories, many suppliers began to lower their prices, with several of the northern producers making larger price reductions than were made earlier in the month in an attempt to increase sales.
Weak downstream consumption continued to be evident on the demand side of the supply/demand equation. The operating rates for many compound fertilizer facilities were still low and some phosphate fertilizer manufacturers curbed their output due to government environmental regulations. The weakening industrial marketplace and agricultural buyers were mainly purchasing only to meet immediate needs.
According to Chemanalyst, ammonia prices in China are likely to face further downside pressure in the coming weeks. The anticipated resumption of production at additional facilities is expected to lift supply, while downstream buyers may delay procurement in anticipation of lower prices. With agricultural demand in the off-season and market momentum weak, further price declines remain likely in the chinese market.
