Fertilizers

HOUSTON (ICIS)–CF Industries said in its latest nitrogen fertilizer market outlook global pricing was supported in the third quarter of 2024 by strong global demand, lower supply availability due to natural gas shortages, China’s absence in urea exports and planned maintenance activities in the Middle East. The US fertilizer producer said that in the near-term their management expects the global supply-demand balance to remain constructive, as inventories globally are believed to be below average and energy spreads continue to be significant between North America and high-cost production in Europe. CF said for North America that while grains prices are under pressure from expected high crop production it is their belief that the fall ammonia application season for the US and Canada will be positive if weather is favorable. US crop returns for 2025 are forecast at similar levels to 2024, which is expected to support stable planted corn acres year on year. The producer said over the medium-term, significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, CF believes the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers. Looking at Brazil the producer said through September 2024 that urea imports to the country were 5.4 million tonnes, 13% higher than through the same period in 2023. CF said Brazil is expected to import 2.0-2.5 million tonnes of urea in the fourth quarter due to forecast higher planted corn acres and nominal domestic production. For India the company feels there is significant urea import requirements remaining through March 2025 due to favorable weather for rice, wheat and other crop production as well as lower-than-targeted domestic urea production driving greater import need. Regarding Europe CF said there is approximately 20% of ammonia and urea capacity which was reported in shutdown or curtailment modes as of September 2024. The company said management believes that ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term given the region’s status as the global marginal producer. For China the producer noted that the ongoing urea export controls by the government continues to limit urea export availability from the country. Through September 2024, China has exported 254,000 tonnes of urea, 91% lower than the same period in 2023. In Russia the company said the urea exports have increased by 5% this year due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase Russian fertilizer, including Brazil and the US. Exports of ammonia are expected to rise with the completion of the country’s Taman port ammonia terminal though CF noted that annual ammonia export volumes are projected to remain below pre-war levels. Looking at the longer-term view of nitrogen the producer is expecting the global supply-demand balance to tighten as global capacity growth over the next four years is not projected to keep pace with expected global lift in demand of approximately 1.5% per year. As far as global production CF said it is expected to remain constrained by continued challenges related to cost and availability of natural gas.

30-Oct-2024

HOUSTON (ICIS)–US LSB Industries said it was able to complete a successful turnaround of their Pryor, Oklahoma, fertilizer facility. The company said in a third quarter update that the investments at Pryor were focused not only on improving its reliability and daily ammonia production volume, but also included the debottlenecking of the facility's urea plant. LSB expects this effort will result in an incremental of 75,000 short tons annually of UAN output. At the El Dorado, Arkansas, facility the producer said it completed the construction of an additional 5,000 short tons of nitric acid storage which is providing the ability to capitalize on incremental sales opportunities not previously available. A turnaround at the Cherokee, Alabama, facility will take place this November and a turnaround at El Dorado is scheduled for the third quarter of 2025, with the primary goal being increased volumes. LSB said it continues to make progress on its two energy transition projects and is expecting to start producing low carbon products at El Dorado beginning in 2026 pending regulatory approval. Regarding the Houston Ship Channel project, the company said it has completed the pre-front end engineering design and is working through the results as well as engaging with potential customers and preparing to select an engineering contractor for the final study. It expects to start that effort during the first half of 2025 with completion by mid-2026. Looking at fertilizer market conditions the producer said the ammonia market is healthy, and pricing has been strong driven by many factors including tight US supply dynamics along with geopolitical concerns and extended turnarounds and outages reducing global inventories LSB also cited the delayed start-up of new production capacity in the US Gulf and an export terminal in Russia For UAN the producer said pricing remains solid due to low inventories in the distribution channel following both spring applications and summer fill program with there being historically low imports and strong exports As it looks ahead it feels there is potential pent-up demand at the retailer and producer level which could lead to favorable order volumes and pricing in the first half of 2025.

30-Oct-2024

HOUSTON (ICIS)–The US Department of Agriculture (USDA) announced it is awarding over $120 million today to fund six fertilizer production projects in Arkansas, California, Illinois, South Dakota, Washington and Wisconsin through the Fertilizer Production Expansion Program (FPEP). Currently the agency has invested over $368 million in 67 projects through FPEP which has an allocation of up to $900 million. Projects receiving this round of funding include fertilizer producer LSB Industries which will be provided a $77 million grant to expand production capacity of its urea and ammonium nitrate facility in Arkansas to 580,000 tons/year. The expanded capacity will allow product to be available to an estimated 450,000 agricultural producers within a four-state region and is expected to create 20 full-time positions. Another project will be at Agtegra Cooperative in South Dakota, which is receiving a $3 million grant to build a new fertilizer manufacturing building and install two storage tanks with a combined capacity of 950,000 gallons. The USDA also announced $20.2 million in awards to 26 projects through the Local Meat Capacity (Local MCap) grant program to expand processing capacity within the meat and poultry industry with a goal of lowering food cost for consumers.

30-Oct-2024

HOUSTON (ICIS)– Spanish fertilizer firm Highfield Resources announced that the Navarra Government has not relinquished the Goyo mining concession, which is one of the three mining concessions for their Muga potash project in Spain. The company said it wanted to clarify the issue as there was previously a procedural flaw which has been identified in the internal administrative coordination process for the granting of the mining concession. There were no details provided regarding the mistake in the process, but Highfield Resources did say it has received confirmation that the ruling is being analyzing. Further, the company said the government stated it will resolve the situation as soon as possible to enable the implementation of the project, which it said has already been evaluated with sufficient rigor. Highfield Resources said at Goyo the production from that section is only expected to happen after year six of their mining plan.

28-Oct-2024

HOUSTON (ICIS)–Australian Fertoz Limited said demand for direct application of rock phosphate and their fertilizer pellet product Fertify remained positive in Q3, with significant orders for Fertify starting in September. The company expects this uptick to continue through late 2024 with the phosphate producer saying this positive direction has come forth despite significant losses for farmers in the Alberta region of Canada due to pre-harvest hailstorms. In its quarterly activities report, Fertoz said there were delays in upgrades to granulation processing equipment by key customers, which slowed sales, but the expectations are for completion of these upgrades by year’s end. Fertoz managing director and CEO Daniel Gleeson said the bulk sample permit for 10,000 tonnes in Barnes is in the final stages with submission of a technical assessment review to the Ministry of Energy, Mines and Low Carbon Innovation. This permit is expected to be ready for the start of the 2025 mining season, with the next bulk sample permit at Pump Station, also for 10,000 tonnes, part of their overall advancement towards receiving an industrial minerals permit for up to 250,000 tonnes. The industrial permit is also expected to be completed early next year with Gleeson saying Fertoz continues to assess their Wapiti project for suitability of making phosphoric acid for the lithium iron phosphate (LFP) battery and liquid phosphate fertilizer markets. “Wapiti samples have been received by the testing party, with positive desktop results achieved, and will now process them in the laboratory for final reportable and definitive results. These final testing results are expected in December,” said Gleeson. “Concurrently we continue to engage with relevant parties of the LFP supply chain industry in North America who have expressed interest in our resources.” He said because of the significant direct government investments across North America and substantial future tax credits that overall interest remains elevated in their high quality, low impurity sedimentary rock phosphate deposits.

28-Oct-2024

HOUSTON (ICIS)–Fertilizer producer Atlas Agro and plant nutrient distributor International Raw Materials have announced a binding strategic offtake and partnership agreement for the green nitrogen fertilizer from Atlas Agro’s Pacific Green Fertilizer plant in Richland, Washington. The Pacific Green Fertilizer plant will be the first at-scale, low carbon fertilizer production facility in the world with it planned to produce 700,000 short tons of nitrogen fertilizer annually and serving farmers across the Pacific Northwest region. The facility will be in the Horn Rapids industrial park in Richland, Washington, and will produce green nitrogen fertilizers in liquid and solid form. Switzerland-based Atlas Agro recently completed its front-end engineering design (FEED) study for the project and received the environmental determination of non-significance from both state and federal agencies. The final investment decision (FID) is expected in early 2025. Atlas Agro’s fertilizer production process will use proven technologies and be powered by renewable energy sources with the company saying low carbon fertilizer products are essential to sustainable food production and addressing climate change. “Our partnership with IRM is a significant milestone in our progress to bring locally produced, green nitrogen fertilizer products to growers in the Pacific Northwest. IRM is a company renowned for its market knowledge and logistics capabilities with deep roots in the Pacific Northwest, and a commitment to bringing sustainable solutions to the agriculture supply chain,” said Petter Ostbo, Atlas Agro CEO. For its part International Raw Materials said adding the green fertilizer products to their marketing and distribution portfolio is well-aligned with the company’s commitment to agricultural sustainability. “We’re seeing increased demand for a variety of solutions across the supply chain as food companies respond to the needs of consumers and look for new tools to address their Scope 3 emissions,” said Tip O'Neill, International Raw Materials president.

23-Oct-2024

LIMA (ICIS)–Brazil’s GDP is expected to grow by 3% in 2024, up sharply from prior forecasts of 2.1% growth published in July, the IMF said this week. Mexico’s growth, however, is expected to slow down to 1.5%, down sharply from the previous 2.2% forecast. For the Latin America and the Caribbean region as a whole, growth is projected at 2.1% in 2024, slightly up from the 1.9% forecast published in July, said the IMF. “[Brazil’s GDP growth forecast] is an upward revision … owing to stronger private consumption and investment in the first half of the year from a tight labor market, government transfers and smaller-than-anticipated disruptions from floods,” said the IMF. “However, with the still-restrictive monetary policy and the expected cooling of the labor market, growth is expected to moderate in 2025.” The more conservative forecast for the Mexican economy reflects weakening domestic demand on the back of monetary policy tightening, said the IMF, who projected the country’s growth would continue slowing down in 2025. The Fund expects Argentina's GDP to fall by 3.5% this year, a forecast considerably more optimistic than most economists. For detailed country-by-country figures see bottom table. INFLATION BATTLE WON – MOSTLYThe IMF celebrated how for most countries in Latin America and the Caribbean inflation rates have dropped significantly from their peaks and continue to be on a downward trend. The Washington-based body highlighted, however, how in some countries inflation is ticking up on the back of, among other factors, weather events, which can suddenly push prices for agricultural products. “Large countries in the region have experienced upward revisions since the April 2024 World Economic Outlook that reflect a mix of 1) robust wage growth preventing faster disinflation in the services sector (Brazil, Mexico); 2) weather events (Colombia); and 3) hikes in regulated electricity tariffs (Chile),” said the IMF. “[For example] Coffee prices rallied, rising by 33.8%, following weather-related supply concerns in key producers Brazil and Vietnam.” Despite adverse weather events, Brazil’s national supply corporation Conab said earlier in October that the 2024-2025 fertilizers-intensive agricultural season is set to reach a record high. Conab is forecasting grain production to reach 322.47 million tonnes in the 2024-2025 harvest, up 8.3% compared with the previous harvest. IMF forecasts (in % change) GDP growth 2023 GDP growth forecast 2024 GDP 2025 growth forecast Inflation 2023 Inflation forecast 2024 Inflation forecast 2025 Brazil 2.9 3.0 2.2 4.6 4.3 3.6 Mexico 3.2 1.5 1.3 5.5 4.7 3.8 Argentina -1.6 -3.5 5.0 133.5 229.8 62.7 Colombia 0.6 1.6 2.5 11.7 6.7 4.5 Chile 0.2 2.5 2.4 7.6 3.9 4.2 Peru -0.6 3.0 2.6 6.3 2.5 1.9 Ecuador 2.4 0.3 1.2 2.2 1.9 2.2 Venezuela 4.0 3.0 3.0 337.5 59.6 71.7 Bolivia 3.1 1.6 2.2 2.6 4.3 4.2 Paraguay 4.7 3.8 3.8 4.6 3.8 4.0 Uruguay 0.4 3.2 3.0 5.9 4.9 5.4 Latin America and the Caribbean 2.2 2.1 2.5 14.8 16.8 8.5

22-Oct-2024

HOUSTON (ICIS)–Affected by tropical weather impacts in late September, Canadian fertilizer major Nutrien confirmed its Florida phosphate facility in White Springs did restart late last week. While the producer has not revealed its post-storm assessment, it did say the operations were currently ramping up production. The site was among other Nutrien operations that were shut down under safety protocols during storm-induced power failures as Hurricane Helene made landfall. Following the storm, the company had stated all its colleagues were safe, but many area roads were closed due to downed power lines and flooding. The first storm was followed by the recent Hurricane Milton, but Nutrien said after that event it was not impacted at the White Springs phosphate facility and it was working with customers on any potential impacts to supply. There were no further details provided regarding supply disruption. Earlier in the day, producer Mosaic said all its Florida-based employees were safe and that the Riverview facility has resumed activity and should return to normal rates by the end of the week. Further, it stated all other Florida sites have resumed operations with its mining activity in the process of restarting. Due to the storm impacts, the company does anticipate a production decrease with it estimated to fall between 200,000-250,000 tonnes in Q4.

21-Oct-2024

HOUSTON (ICIS)–Rates for shipping containers from east Asia and China to the US continue to face downward pressure after an early end to the peak pre-holiday shipping season, but backlogs at some East Coast ports following a 3-day strike could lead to short-term delays. Rates to the US West Coast edged lower by 3% this week, according to online freight shipping marketplace and platform provider Freightos and as shown in the following chart. Judah Levine, head of research at Freightos, said transpacific rates are now down by 30% from the peaks during July but remain several thousand dollars higher than what would be typical peak season rates. They are also about $1,000/FEU (40-foot equivalent units) higher than the adjusted floor set in April to account for diversions away from the Red Sea. “As long as Red Sea diversions continue to absorb capacity on an industry level, prices may not fall much further than seen back in April,” Levine said. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. They also transport liquid chemicals in isotanks. PORT CONGESTION The International Longshoremen’s Association (ILA) strike at US Gulf and East Coast ports lasted just three days, and market analysts initially expected backlogs created by the work stoppage to be cleared up in two to three weeks. Some ports, such as the Port of New York/New Jersey, were expecting to be back to normal sooner than that. But Levine said the backlog at the Port of Savannah, Georgia still needs another two weeks to get back to normal as Hurricane Milton added to the number of waiting vessels. Ships are waiting more than two days to get into Savannah, and Levine said other ports are citing delays of one to four days, which he termed as significant congestion, but not extreme. Port Tampa Bay remains closed and is expected to reopen on Monday after damage caused by Milton, which will mostly impact the fertilizer industry. Levine said that some carriers have announced blank sailing in response to the congestion, but this may also be aimed at reducing capacity to adjust for the lower, post-peak season volumes. Visit the ICIS Logistics – impact on chemicals and energy topic page

16-Oct-2024

LIMA (ICIS)–Brazil’s Senate approved on 15 October the creation of a National Inventory of Chemical Substances aiming at “reducing negative impacts” of toxic chemicals on human and environmental health. The inventory and the associated public bodies to ensure compliance will put Latin America’s largest economy close to the EU’s Reach regulatory system regarding chemicals. In the 27-country EU, the stringent Reach has since its inception at the end of the 2000s banned several chemicals and put hundreds of others in the so-called list of Substances of Very High Concern (SVHC). While industry has repeatedly said it support the Reach principles, increased costs associated with complying with the regulation has put a burden in some small- and medium-sized enterprises (SMEs), a burden their peers in jurisdictions such China or the US do not have to face. Industry has also argued that while Reach may indeed avoid the entry of many toxic chemicals into the EU, those same chemicals are nonetheless still used in the manufacturing of many goods in overseas jurisdictions which end up entering the EU. On Tuesday, the trade group representing Brazil’s chemicals producers Abiquim welcomed the measure, arguing it had lobbying for the creation of the registry since 2014. The bill, called in Parliament’s jargon PL 6120/2019, now awaits presidential sanction from Brazil’s President Luiz Inacio Lula da Silva, and after that it will come into force. “[The Inventory] establishes rules for the assessment and control of the risk of substances used in the national territory, to be determined by committees of experts, and defines criteria for the manufacture, import, and use of chemical components,” said the Senate after passing the bill. “The bill creates the Technical Committee for the Evaluation of Chemical Substances and the Deliberative Committee on Chemical Substances, made up of experts with knowledge in the areas of the environment, health, trade and metrology. It also establishes the Registry of Chemical Substances, which will form the inventory and the public access database on substances imported or produced in Brazil.” The parliamentarians added that it will fall on manufacturers and importers of chemical substances to provide information to the inventory. If they do not comply in an orderly and timely manner, they will be subject to fines of up to 40,000 minimum wages – in 2024, Brazil’s minimum wage was set at Brazilian reais (R) 1,412/month ($249/month). The maximum fine, thus, would stand at nearly $10 million. However, the aim to control what chemicals are used and how in Brazilian manufacturing will stop at some substances which the regulators thought were of national interest, and the law does not apply to radioactive substances or substances intended for national defense, for instance. It will not apply either to products subject to control by specific legislation, such as food, medicines, pesticides, cosmetics, fertilizers, and veterinary products, among others. “In the case of new substances that require unprecedented studies in Brazil for the information to be made available, the bill guarantees the right to ownership of the studies for up to ten years,” said the Senate. “Other provisions of the project impose criteria for the evaluation of substances by the responsible committees, establish restrictions on the performance of tests on animals and establish the Registration, Evaluation and Inspection Fee for Chemical Substances.” BROAD DAYLIGHT CHEMICALSIn 2023, when the draft proposals were already gaining traction in Parliament, a consultancy focused on chemicals regulation, the Chemical Inspection and Regulation Service (CIRS) Group, summarized the regulation’s main point in a report titled "Brazil's REACH-like Regulation is Approaching". In it, it said from now companies’ declarations on the chemicals they use in their manufacturing processes must include the following aspects: – The identification data of manufacturers and importers specified in regulations – The annual production and import amount of chemical substances – The exact identification of chemicals including names and CAS number (if they exist) issued by the Chemical Abstracts Service (CAS) or the International Union of Pure and Applied Chemistry (IUPAC) – Hazard classifications made under the Globally Harmonized System (GHS) and current Brazilian regulation – Recommended uses of chemical substances You can read CIRS Group’s report here. CLARITY, TRANSPARENCY, PREDICTABILITYAbiquim welcomed on Tuesday the bill with open arms. It is worth noting the trade group represents large producers – Braskem has a commanding voice in the group, for instance – which tend to be the players more capable of dealing with new and extra regulation. According to Abiquim’s CEO, Andre Passos, the new bodies created with the bill will help optimize the use of public resources, as well as bring positive impacts to competitiveness, innovation and economic growth, he said. “We will be able to count on a regulatory model that, in fact, provides the sector with greater clarity of its requirements, transparency in its processes, and long-term predictability, thus allowing the chemical industry to define future investments in the country,” he said. “[With this measure] Brazil joins a select list of the most developed and economically sustainable nations.” Abiquim said several studies have backed having a strict registry of chemicals because official control – with companies collaboration – has helped reduce negative impacts some chemicals can have on human and environmental health. The trade group said the EU had been its paramount source of inspiration, but added that several jurisdictions, following the former’s example, have implemented or are aiming to implement similar regulations. “Based on these initiatives, whose monitoring of health and environmental results demonstrated a positive trend, we presented a proposal to the CONASQ [Brazil’s National Commission for Chemical Safety] Working Group that could be applied in Brazil,” said Camila Hubner, the trade group’s manager for regulatory affairs and sustainability. According to Abiquim, similar regulatory frameworks have been implemented or are in the phase of doing so in the following jurisdictions: the US, the EU’s 27 countries, Australia, New Zealand, Japan, South Korea, China, Switzerland, the UK (which, for now, has basically applied Reach post-exit from the EU), Turkey, the Eurasian Economic Union (which includes Russia, Kazakhstan, Belarus, and Armenia), Canada, Costa Rica, Ecuador, Chile, and Colombia. After naming the parliamentarians who lobbied hard to have these regulations approved, Abiquim’s Passos said: “It is very important to remember these names because they understood that regulation was needed based on science and the risks that chemical substances can present, prioritizing human health and the environment. “On behalf of the chemical industry, I would like to thank each congressman who made an effort.” Front page picture: Brazil’s Senate approves the creation of the National Inventory of Chemical Substances, 15 October 2024 Picture source: Brazil’s Senate news services (Agência Senado) Focus article by Jonathan Lopez

16-Oct-2024