Fertilizers

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 22 November. Eastern EU nations call for duties on imports of fertilizers from Russia and Belarus Countries such as Poland, Lithuania, Latvia and Estonia have submitted a letter to the European Commission calling for customs duty to be imposed on imports of fertilizers from Russia and Belarus, the Polish Ministry of Development and Technology has confirmed. Europe apathetic to PO asset reviews as oversupply plagues market Two propylene oxide (PO) plants have been added to the pile of European assets under review as the market grapples with chronic oversupply, low utilisation and persistent low demand. Chems firms struggle to gain traction in Q3 The chemicals sectors’ third-quarter earnings period has underlined how little momentum has built up in the last 12 months, and how tepid expectations are for the closing months of the year. Tightening Russia oil supply may support oil benchmarks as Russia-Ukraine conflict marks 1,000th day Global oil benchmarks could find support from tighter Russian oil supply in coming weeks amid calls for stricter EU sanctions and escalating geopolitical tensions. Europe, US chemicals have most to lose from a new trade war Donald Trump’s resounding victory in the US presidential election gives him a powerful mandate for a policy agenda which includes ramping up trade tariffs across the board as he pursues his re-shoring agenda.

25-Nov-2024

LONDON (ICIS)–Countries such as Poland, Lithuania, Latvia and Estonia have submitted a letter to the European Commission calling for customs duty to be imposed on imports of fertilizers from Russia and Belarus, the Polish Ministry of Development and Technology has confirmed. The duty being discussed is 30-40% for nitrogen, phosphate and potash fertilizers. Market participants believe a duty is unlikely to be imposed given Europe’s dependence on Russian fertilizer, especially when gas prices are rising, which could hit domestic production in Europe. European buyers have delayed imports, including of urea, to the first quarter of 2025. It is unlikely any government would want to antagonize the farming community further when there have been protests by farmers across many countries over the cost of inputs and taxes. Domestic producers, including in northwest Europe such as Germany, have been campaigning for duties on Russian fertilizers, but met with no success. Local producers say imports are available at competitive prices, partly due to the low cost of Russian natural gas. This puts pressure on European producers, particularly when it comes to remaining competitive while maintaining profitability. The concern is that the lower Russian prices could lead to an oversupply, creating unfair competition for European suppliers who may not be able to match those prices. There is also a broader concern about Europe, and Germany in particular, becoming too dependent on Russian resources – both in terms of urea and potentially other agricultural inputs. Data from the first eight months of the year shows an increase of more than 50% in fertilizer imports to the EU from Russia compared with the same period last year. In January-August, Russia was the biggest supplier of urea to Poland, at 426,342 tonnes, more than double the 207,981 tonnes in the same period of 2023, according to customs data. Additional reporting by Julia Meehan Thumbnail image source: Shutterstock

22-Nov-2024

HOUSTON (ICIS)–Fertilizer developer Genesis Fertilizers announced it has signed a Front-End Engineering Design (FEED) agreement with South Korean construction firm DL Engineering & Construction (DL E&C) for their proposed low-carbon nitrogen fertilizer facility in Saskatchewan, Canada. The company said DL E&C’s expertise in world-class fertilizer plant design is evident in their successful of the Ma’aden Ammonia III project in Saudi Arabia and exemplifies their ability to deliver complex projects on time and under budget. Genesis Fertilizers also noted that the FEED phase will establish the essential technical and design groundwork for building a facility that is both safe and efficient with DL E&C set to collaborate with Canada’s PCL Construction throughout preconstruction. They will be charged with creating a comprehensive blueprint, which integrates advanced carbon capture technology, that can deliver sequestration of up to 1 million tonnes of CO₂ annually. The FEED phase is scheduled to start in December and begin setting defined timelines for the project as the company is targeting to have commercial operations underway by 2029. “This FEED agreement is a monumental step in our journey to deliver sustainable, low-carbon fertilizer for Western Canadian farmers,” said Genesis Fertilizers CEO Jason Mann. “Thanks to years of planning, and support from our farming community, we now have a clear path forward for the design of the facility.” “While there is still work to do to finance and construct a cutting-edge fertilizer plant, we are excited to collaborate with DL E&C and PCL Construction to make this vision a reality and bring lasting benefits to Canadian agriculture.” As proposed, there would eventually be both ammonia and urea production at the site with plans to have 75% of output for farmer commitments with the balance sold on the open market. As a vertically integrated, farmer-owned initiative, Genesis Fertilizers intends to return profits directly to its farmer-owners and the company said it recognizes the critical role of farmers, whose support to date has driven this initiative forward. The company said through this project it is seeking to reduce dependency on imports of nitrogen fertilizers by providing a sustainable, farmer-owned alternative.

21-Nov-2024

HOUSTON (ICIS)–Although some locations still have some final acreage remaining, the latest US Department of Agriculture (USDA) weekly crop progress report is reflecting a completion of corn and soybean harvesting for 2024. While a final yield tally will not be immediately available, it has been discussed within agriculture and fertilizer segments as having been a more productive year – especially for corn – than was anticipated given the extremely hot and very dry conditions present this summer. For fertilizers, there is optimism remaining that over the next few weeks, winter will not quickly settle in and that weather conditions will be beneficial enough to see post-harvest applications gain more momentum. One product that is expected to see an uptick as long as there is no further rainfall is ammonia, with wet fields having been an issue for undertaking these end-of-the-year inputs through the first half of November in some states. The USDA did report there is now 77% of the cotton crop complete with the sorghum harvest having reached 95%. The next significant crop will be winter wheat, which the weekly update showed is now 94% planted with 84% having emerged. There is 49% of the crop rated as being in good to excellent condition.

18-Nov-2024

SAO PAULO (ICIS)–Here are some of the stories from ICIS Latin America for the week ended on 16 November. NEWS Brazil to investigate alleged US, Canada PE dumpingBrazil is to start an investigation into polyethylene (PE) arriving on its shores from the US and Canada and whether the material constituted dumping, the government said. Unipar sees light at tunnel end as prices rise, Argentina revivesManagement at Brazil’s chloralkali chain producer Unipar this week held onto improved financial results in Q3, quarter on quarter, to assert the industry may be finally going through the beginning of the end of the downturn. Mexico confident US will realize tariff-free trade benefits both – SheinbaumRenegotiation in 2026 will be key for Mexico to show the US how the United States–Mexico–Canada Agreement (USMCA) is equally beneficial for both countries, the Mexican president said this week. Pemex targets petrochemicals, fertilizers expansion, $2.4-billion savings in 2025Pemex is to overhaul its La Cangrejera and Morelos petrochemicals complex in Mexico’s southern state of Veracruz to sharply increase production, the state-owned energy major said this week. INSIGHT: Mexico’s manufacturers hopeful USMCA renegotiation could spare them from tariffsPolicymakers and companies in Mexico are coming to terms with a potential shift in trade policies in the US after Donald Trump’s decisive victory in the presidential election last week. Mexico in strong position to renegotiate USMCA, tariff panic premature – Braskem Idesa execA potential US import tariff of 10% on Mexican goods is looming large on the country's export and petrochemicals-intensive manufacturing sectors, but it is early days and the worries are premature, according to the head of institutional relations at polyethylene (PE) producer Braskem Idesa. Brazil's Petrobras begins commercial operations at gas processing unit in RioPetrobras has begun commercial operations at its Natural Gas Processing Unit (UPGN) at the Boaventura Energy Complex in Itaboraí, Rio de Janeiro state, the Brazilian state-owned energy major said on Monday. PRICING LatAm PP domestic, international prices stable on sufficient supply, soft demandDomestic and international polypropylene (PP) prices were assessed unchanged this week across Latin American countries. LatAm PE domestic prices steady to lower on weak demand, sufficient supplyDomestic polyethylene (PE) prices were assessed as steady to lower across Latin American (LatAm) countries while international prices were unchanged this week.

18-Nov-2024

HOUSTON (ICIS)–Canadian fertilizer developer Millennial Potash, which is advancing the Banio Potash project in Gabon, announced it has achieved progress at both the Mengali port construction site and the new thermal electricity plant. The company said the port and power generation station represent critical infrastructure enhancements and are integral for a successful potash project, with the Mengali port a key part of the Grande Mayumba Programme, a joint venture for sustainable development between the Republic of Gabon and the African Conservation Development Group. Currently international construction firm Covec Gabon is undertaking earthworks for the port with development set to proceed in phases, but it will eventually be able to accommodate barges and landing craft. Future phases will involve constructing a mineral terminal, storage area, and stacker reclaimer with a conveyor system for loading large ocean-going vessels. It is expected to provide a vital infrastructure link for the Banio project as it would allow for export of bulk potash to overseas markets. Millennial said construction has commenced on a thermal power generation station located south of Mayumba, near the airport, with present work including foundation construction within the facility compound. The power station is scheduled to arrive by barge at Mengali port later this year and is expected to be installed and operational by mid-2025. The construction of the first phase, with a capacity of 8.5 megawatts, is expected to be completed in July 2025. The power plant project is under the direction of contractor Nuez et Fils and it is estimated that the total investment will be approximately $125 million. The company said the new power plant at Mayumba is viewed as a major infrastructure advancement for the region and this new reliable power source is expected to stimulate regional development. “These infrastructure developments are crucial for advancing the project and enhancing the economic viability of our proposed solution mining and conventional processing methods for potash production. The construction of the port and power plant, along with the associated infrastructure, will significantly mitigate risks related to future mining, processing, and shipping operations,” said Farhad Abasov, Millennial Potash chair. “Millennial remains committed to supporting the Gabonese government’s efforts to develop infrastructure in southern Gabon and will keep shareholders informed on the progress of these projects.” The Banio project is in the south-west corner of Gabon, approximately 450 km south of Libreville along the Atlantic coast. The maiden mineral resource estimate showed an indicated mineral resource estimate of 656.6 million tonnes at a grade of 15.9%, with an inferred mineral resource estimate of 1.15 billion tonnes at a grade of 16%.

13-Nov-2024

HOUSTON (ICIS)–Here are the top stories from ICIS News from the week ended 8 November. INSIGHT: Pile of chemical assets under strategic review grows. Who’s buying? Dow’s announcement that it will put its European polyurethanes (PU) business under strategic review adds to the growing pile of assets being evaluated for sale, restructuring or shutdown – mostly in Europe. A key question then becomes: Who, if anyone, could buy these assets? US Celanese to slash dividend, idle plants after big Q3 earnings miss Celanese plans to cut its quarterly dividend by 95% in Q1 2025 and idle plants in every region after third-quarter adjusted earnings fell well below guidance, the US-based acetyls and engineered materials producer said on Monday. Sharp auto decline drives massive Celanese earnings and outlook shortfalls; Acetyls plants idled A rapid decline in the automotive market, along with weak industrial demand – particularly in Europe – led to a major earnings shortfall for Celanese in Q3. Continued weakness and customer inventory destocking will drive an even bigger shortfall in Q4. INSIGHT: Trump to bring US chems more tariffs, fewer taxes, regulations US President-Elect Donald Trump has pledged to impose more tariffs, lower corporate taxes and lighten companies' regulatory burden, a continuation of what US chemical producers saw during his first term of office in 2016-2020. INSIGHT: Trump to pursue friendlier energy policies at expense of renewables Oil and gas production, the main source of the feedstock and energy used by the petrochemical industry, should benefit from policies proposed by President-Elect Donald Trump, while hydrogen and renewable fuels could lose some of the support they receive from the federal government. Labor disruptions at Canada West and East coast ports continue The labor disruptions at Canada’s West and East coast ports continued on Friday while the chemical, fertilizer and other industries keep warning about impacts on manufacturers and the country's overall economy.

11-Nov-2024

TORONTO (ICIS)–The labor disruptions at Canada’s West and East coast ports continued on Friday while the chemical, fertilizer and other industries keep warning about impacts on manufacturers and the country's overall economy. WEST COAST PORTS At Vancouver and other west coast ports, a strike and lockout by some 730 ship and dock foremen, who supervise more than 7,000 workers, was in its fifth day on Friday. Employers and union officials are due to meet on Saturday, 9 November, for further negotiations, the British Columbia Maritimes Employers Association (BCMEA) said in an update. At the Port of Vancouver, which is Canada’s largest port by far, the disruptions impact BCMEA member terminals that employ workers represented by labor union International Longshore and Warehouse Union Local 514. Operations at the ports auto and breakbulk sectors and at four container terminals are impacted by the disruptions, and rail embargoes have been put in place, the Port of Vancouver said. However, the port remains open. PORT OF MONTREAL In Montreal, a strike at two of the ports four container terminals and a strike on overtime at all four terminals was in its ninth day on Friday. The two terminals account for about 40% of the port’s total container handling capacity. The port’s logistics dry bulk and liquid bulk terminals, and its grain terminal remain in service. The Maritime Employers Association (MEA) said on Thursday that it made a final wage offer and wants a reply from labor union Syndicat des debardeurs by Sunday, 10 November, 10:00 local time. If no agreement is reached, only essential services and activities unrelated to longshoring would continue at the port, starting 10 November, 21:00 local time, MEA said. CALL FOR GOVERNMENT TO INTERVENEThe CEO of the Montreal Port Authority (MPA), Julie Gascon, on Thursday called for federal government intervention to end the dispute. “There's no denying that our reputation has been harmed by uncertainty over the reliability of our activities, and in the long run, we are losing competitiveness,” she said. Federal labor minister Steven MacKinnon reminded port employers and unions that “public services, such as ports, exist to serve the needs of Canadians”. The negotiations to settle the disputes were “progressing at an insufficient pace”, he said, adding: “The parties must reach an agreement quickly.” In August, the government intervened in a labor dispute at the country’s freight railroads, ordering the railroads and workers to end their rail shutdown and resume service. However, political commentators said that the minority government under Prime Minister Justin Trudeau was hesitant to intervene in the port labor disputes as it relies on the left-leaning New Democratic Party (NDP) for support in parliament to stay in power. The NDP is close to labor unions. A couple of days after the government’s intervention to end the freight rail labor dispute, the NDP ended a “supply and confidence agreement” from 2022 under which it had committed to supporting the Liberals until June 2025. The NDP now votes in parliament on a case-by-case basis, it has said. This means that the NDP could vote with the opposition Conservatives to bring the government down and trigger an early election. The Conservatives are far ahead of the Liberals in opinion polls. Thumbnail photo source: Port of Vancouver

08-Nov-2024

HOUSTON (ICIS)–Nutrien said demand in North America for the fall fertilizer application has been supported by a relatively early harvest along with the need to replenish soil nutrients following a period of lower field activity in the third quarter. In its latest market outlook, the Canadian fertilizer major said favorable growing conditions in the US have supported expectations for record corn and soybean yields and significant soil nutrient removal in 2024. The company did note that prospective crop margins have declined compared to the historically high levels in recent years, however Nutrien’s view is most growers in the key region of the US Midwest remain in a healthy financial position. One positive factor that the producer sees is that global grain stocks remain below historical average levels which support export demand for North American crops and firm prices for key agriculture commodities such as rice, sugar and palm oil. Looking at crop nutrient, Nutrien said it has raised 2024 global potash shipment forecast to 70 million – 72 million tonnes primarily driven by stronger expected demand in Brazil and Southeast Asia. The company said it believes the increase in global shipments this year has been driven by an underlying increase in consumption in key markets. The forecast for global potash shipments in 2025 is between 71 million – 74 million tonnes, which Nutrien said supported by the need to replenish soil nutrient levels and the relative affordability of potash. It does anticipate limited new capacity next year and the potential for incremental supply tightness with demand growth. Regarding global ammonia the producer said prices have been supported by supply outages, project delays and higher European natural gas values. For urea Nutrien said that Chinese export restrictions, production challenges from major exporters and strong demand from India and Brazil have tightened the global urea market. It noted that US nitrogen inventory was estimated to be well below average levels at the end of the third quarter, and the company is expecting it will support demand in the fourth quarter of 2024 and early 2025. For global phosphates, the situation remains tight which is furthered by Chinese export restrictions and production outages in the US. Nutrien said it anticipates some impact on global demand due to tight supply and weaker affordability relative to potash and nitrogen.

06-Nov-2024

HOUSTON (ICIS)–As a fresh labor union strike halted activity at Canadian ports along its west coast on Monday, US fertilizer participants were watching the latest worker strife unfold with only moderate concerns over how this activity might disrupt nutrient flow. Fertilizer sources noted that the sentiment currently is that this work stoppage could be short in duration, as other recent strike actions have turned out with similar results. As a US trader said, the prior halt of the railroads in Canada “didn't seem to have much effect on the market last time”. If this strike activity were to carry forward, domestic sources highlighted that it would not be a widespread event for fertilizers in the US as it would be felt primarily within the potash segment as well as for sulphur movement. With a domestic participant commenting that for the other nutrients, especially the nitrogen-based offerings, that this latest event “hasn't yet affected us or any pricing”. This segment of west coast ports is estimated to move over 21,000 tonnes of potash daily for oversea shipment, with Fertilizer Canada calculating this latest shutdown could cost the industry around (C$) 9.7 million ($7.0 million) per day in lost sales revenue. The industry group had cautioned ahead of the strike occurring that another disruption to Canada’s supply chains would further damage the country’s reputation as a dependable trading partner and jeopardizes food security around the world. “We are once again on the brink of losing access to a critical trade corridor, and potash fertilizer will be one of the hardest hit commodities,” said Karen Proud, Fertilizer Canada president and CEO. The group noted that the 2023 labor disruption of west coast ports cost the fertilizer industry over C$126 million and took 13 days to resolve and that Canada lost significant market share to Russia in key markets such as Indonesia and Malaysia afterwards. Fertilizer major Nutrien said its main concern was that the strike action will prevent potash marketing agency Canpotex from exporting volumes out of the Port of Vancouver. “Canpotex is exploring alternatives to mitigate the potential impact to customers, however a prolonged disruption could negatively impact farmers and food security around the globe,” said a Nutrien spokesperson. “We urge the parties to come to an agreement before damage is done to Canada’s reputation as a reliable, global potash supplier.” ($1 = C$1.39)

04-Nov-2024