Urea and nitrates

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)–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)–Fertilizer producer Atlas Agro announced it has signed a memorandum of understanding (MOU) with renewable energy company Casa dos Ventos with a goal of utilising wind and solar projects to supply renewable energy for green fertilizer produced using green hydrogen. The company said the partnership seeks to combine the competitiveness of Casa dos Ventos’ renewable portfolio and solutions to produce hydrogen at Atlas Agro’s Uberaba fertilizer plant, contributing to the expansion of the renewable energy matrix and the sustainability of Brazilian agriculture. The Atlas Agro project is expected to start commercial operations in 2028 with the capacity to produce approximately 530,000 short tons/year of green ammonium nitrate, considered essential for reducing carbon emissions in agricultural production. The plant will require an average of 300 megawatt of renewable energy, which will be supplied by Casa dos Ventos. The project aims not only to produce a more sustainable input, but also to reduce Brazil’s dependence on imports as the country is currently the largest global importer with an estimated 41 million short tons arriving in 2023. “Atlas Agro’s mission is to decarbonize global nitrogen production. Cost-competitive and reliable energy is the basis for producing sustainable nitrogen fertilizers at affordable prices for local farmers,” said Knut Karlsen, Atlas Agro Brazil president. “We are excited to partner with Casa dos Ventos to bring green and locally produced nitrogen fertilizers to Brazilian agriculture.”

31-Oct-2024

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)–Agrimin Limited said their Mackay potash project in Western Australia is continuing to advance towards a final investment decision and that the development is now in the stage three assessment with the environmental regulators. The project is planned to be able to manufacture standard and granular sulphate of potash (SOP) products with its definitive feasibility study (DFS), completed in July 2020, showing that once in operation it could be the world’s lowest cost source of seaborne SOP. In a quarterly update on activities, the company said the timeline from the Western Australian Environmental Protection Authority is still expected to come in 2024, with supplementary government approval expected to follow in the first half of 2025. Agrimin said it is also progressing on the other secondary approvals and licenses necessary for the project with the Department of Energy, Mines, Industry Regulation and Safety and the Department of Water and Environmental Regulation. Regarding the final investment decision, the company said it is undertaking activities to reach that status including engineering efforts with advanced process testing and preparation for contractor involvement. It is also engaged in execution planning with a focus on critical path analysis and mitigation including earliest possible environmental surveys and baseline monitoring. Agrimin said it will also be working on funding for the project including potential strategic partnerships.

28-Oct-2024

SINGAPORE (ICIS)–Here are the top stories from ICIS News Asia and the Middle East for the week ended 4 October. INSIGHT: Bold policy moves might not arrest China economic slowdown By Nurluqman Suratman 30-Sep-24 13:51 SINGAPORE (ICIS)–In a bold move to revitalize its economy and restore investor confidence, China unveiled a comprehensive package of monetary and fiscal measures less than a week before the country goes on a week-long holiday. Focus: China urea to stay weak on ample supply and low demand By Rita Wang 30-Sep-24 18:14 SINGAPORE (ICIS)–China's urea market rebounded slightly recently, but the outlook for the spot market remains weak due to high inventories, restricted exports and the upcoming lull season. Asia EDC spot demand likely to taper; regional supply to improve in end-2024 By Jonathan Chou 01-Oct-24 18:15 SINGAPORE (ICIS)–Asia's spot EDC demand may be capped in the near term with buyers adequately stocked. Market players are watching out for ripple effects from China’s recent blitz of stimulus measures that may impact conditions for main derivative polyvinyl chloride (PVC). Asia PVC conditions may see limited impact from China stimulus measures By Jonathan Chou 02-Oct-24 13:48 SINGAPORE (ICIS)–Some bullishness was observed recently in China’s domestic market, in part due to its government’s stimulus measures. India faces BOPP film overcapacity on start-ups in next two years By Aswin Kondapally 02-Oct-24 22:11 MUMBAI (ICIS)–India is facing an oversupply of biaxially oriented polypropylene (BOPP) film, with nine new domestic production lines set to come on stream, which will exert heavy pressure on the market over the next two years. Asia MMA prices see first sharp fall in 2024 on bearish market conditions By Jasmine Khoo 03-Oct-24 10:06 SINGAPORE (ICIS)–Asia methyl methacrylate (MMA) spot import prices were assessed significantly softer in the week ended 27 September, reflecting significant price falls for the first time in 2024. INSIGHT: China Sept small-to-medium factories' output shrinks on poor demand By Jonathan Yee 04-Oct-24 11:00 SINGAPORE (ICIS)–Manufacturing output of China’s small to medium enterprises went back to into contraction mode in September, underscoring continued and widespread weakness in the world’s second-biggest economy.

07-Oct-2024

HOUSTON (ICIS)–US fertilizer producer CF Industries confirmed it had an accident on 2 October at their nitrogen fertilizer complex in Donaldsonville, Louisiana, which resulted in an employee being transferred to a local hospital where they later passed away. The company said through a spokesperson that the incident occurred at approximately 13:45 and that the medical personnel onsite did quickly respond and assessed the injuries, with the individual then transported to a nearby hospital. CF is not identifying the worker or providing any additional details surrounding the circumstances of the accident but said it is focused on supporting this individual’s family and fellow employees at the fertilizer complex. “We are deeply saddened to confirm that a CF Industries employee at the Donaldsonville Complex passed away in a local hospital following an accident onsite earlier today. Our thoughts and prayers are with their family at this difficult time. We are committed to supporting the family as well as providing assistance to the Donaldsonville team,” said a CF Industries spokesperson. The producer did add that this was an isolated incident with no related operational issues or offsite impacts. Located on the Mississippi River in Ascension Parish, the Donaldsonville site is the largest production complex in the world producing anhydrous ammonia, urea, and urea ammonium nitrate (UAN) and nitric acid.

03-Oct-2024