June 30, 2012 at 11:59 (Fertilizers)
In the last years, China has been the great locomotive for the fertilizer industry. Between 2002 and 2010 the Chinese fertilizer consumption increased at an annual rate of 3%. But things always change. The government’s 12th Five-Year Plan, adopted in March 2011, emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future. However, China has made only marginal progress toward these rebalancing goals. Chinese economic growth slowed in the first quarter 2012 to the weakest since 2009 as the government’s campaign to rein in inflation and home prices eroded domestic consumption and the European debt crisis curbed exports. Demand for grains hasn’t slowed because of increased industrial use and livestock consumption, with China National Grain & Oils Information Center estimating corn imports may more than triple this year.
Now China is forecasted to have in the 2010-2015 period an increase in fertilizer consumption at an annual rate of 1.7%. The slowdown is expected to be primary in the two most important nutrients, namely nitrogen, at an annual rate of 1.4%, and phosphorus at an annual rate of 0.5%. Potash is expected to have a strong increase, at 6.2% for the mentioned period, but they cover their needs of this nutrient importing about half of their needs. They have been traditionally the global second largest potash importer after India, accounting for about a fifth of the global trade. Chinese agricultural production growth is limited by low yields, lack of water and technology, which can be improved with policy and technological support.
China, with some 30% of the world fertilizer consumption, is the major player, and the key factor in determining the future trends of the global fertilizer market. They have done incredible advances, becoming self-reliant for urea in the 2003 and for DAP in the 2006, being, as said above, highly dependent on potash imports. China exported 3.6 million tons urea in 2011, excluding exports of small bags (<10kg) and cross border trade with Vietnam, compared with seven million tons in 2010. More severe export restrictions and higher domestic prices led to reduced exports, despite the sharply higher level of global urea prices. They have strongly emerged in the field of speciality fertilizers, such as controlled-release fertilizers and potassium nitrate. The dynamics of the fertilizer production and imports of the second world economy will have the most critical impact on the future of the global fertilizer industry.
June 30, 2012 at 11:30 (Fertilizers, Nitrogenous Fertilizers)
Russian fertilizer maker Uralchem acquired in the beginning of the year an additional 41.2% of the shares of Perm Mineral Fertilizers (PMF) reaching a controlling interest of 87.7%. Uralchem is one of the largest producers of nitrogen and phosphate fertilizers in Russia. They are the second largest ammonium nitrate producer in the world and number one in Russia and the second largest nitrogen fertilizer producer in Russia.
Uralchem has capacities for the production of 2.8 million tonnes of ammonium nitrate, 2.2 million tonnes of ammonia, 0.8 million tonnes of complex fertilizers (NPK), 0.8 million tonnes of MAP and DAP and 1.2 million tonnes of urea per year. The company, which owns fertilizer plants at Kirovo-Chepetsk, Berezniki and Voskresensk, produced in 2010 10% more fertilizers compared to the previous year reaching nearly 4.9 million tonnes. In the 2011 Uralchem accounted for more than 16% of all Russian nitrogen fertilizers.
Uralchem was incorporated in Cyprus in May 2006. As at 31 March 2012 it was 95.5% owned by CI-Chemical Invest Limited, incorporated in Cyprus; the remaining shares were held by management. OAO Perm Mineral Fertilizers specializes in ammonia and urea manufacturing and the main products are primarily sold in the export markets. UralChem said first-quarter profit doubled as its acquisition of PMF boosted output. In the 1Q of 2012 they sold 204,000 tonnes ammonia as compared to 115,000 tonnes ammonia in the 1Q in 2011.
June 30, 2012 at 06:15 (Fertilizers, Nitrogenous Fertilizers)
The Indian fertilizer ministry wants to encourage new investments in the natural gas segment as the domestic consumption of urea is expected to go up by about 13% to 34 million tonnes in five years. The natural gas output from its most prolific field—Reliance Industries’ D6 field in the Krishna Godavari basin–is declining. Inadequate availability of gas is delaying many power and fertilizer projects. The previous policy to encourage investments helped in adding only 2 million tonnes of capacity as there was no certainty of getting natural gas at a steady price over the long term. Policy makers are hoping to address this hurdle by giving pass through status to gas price. Compared to the domestic price of US$4.2 per million metric British thermal unit (mmBtu), imported LNG is available at about US$15-18 a unit. While the domestic gas production is declining, the fertilizer sector’s requirement will go up by 65 million metric standard cubic metres a day by 2014-15. As of now, fertilizers get top priority in the natural gas supply, followed by the city gas distribution sector. Power sector, the biggest consumer of gas in India, comes third on the priority list for gas allocation despite its critical role in the national economy.
There are different roads to increase India’s natural gas supply.
India has asked the USA to supply it with liquid shale gas, as it continues to reduce dependence on oil imports from Iran, which is targeted by sanctions from Washington due to its aggresive nuclear ambitions. India has pledged to continue reducing imports from Iran, which used to be its No. 2 supplier after Saudi Arabia, but as far as we know no specific target has been set yet. Shale gas development in the United States has turned the gas market there from shortage to glut, and cheap US LNG export projects are soon expected to provide stiff competition for Australian LNG export developments. The US Energy Information Administration estimates that China holds the world’s largest shale gas reserves, with 1,275 trillion cubic feet, followed by the United States at 862 trillion cubic feet.
Another supply road could come from Turkmenistan through a 1,700 km cross-border pipeline passing through Afghanistan and Pakistan. While the transportation charges for gas would be decided by the consortium of companies that would construct the Turkmenistan-Afghanistan-Pakistan-India (Tapi) pipeline, India would pay a US$0.50 per million metric British thermal unit (mmBtu) transit fee to Afghanistan and Pakistan for letting gas through their territory. In spite of this charges charges, the price India would pay to the supplier is expected to be lower than the US$14-16 per unit of gas now available in the global spot market. India is estimated to get 38 mmscmd and state-owned gas transporter Gail India would lift the gas for the local consumers.
June 30, 2012 at 03:49 (Fertilizers, Nitrogenous Fertilizers)
Indian Farmers Fertiliser Co-operative Ltd (Iffco) wholly owned Dubai-based subsidiary, Kisan International Trading FZE, and a Canadian partner, are setting up a gas-based ammonia-urea complex in Canada. The complex is likely to be located in eastern Canada and will comprise two ammonia units, a couple of urea plants, and a dedicated jetty for export. The envisaged initial capacity for two single-stream ammonia plants would be 2,200 tonnes a day each. The urea plants will have a capacity of around 4,000 tonnes a day each (which may have two sub-streams). The proposed jetty would have to handle ammonia at a throughput of 1,000 tonnes an hour and urea at 1,200-1,500 tonnes an hour. Construction work is expected to take three years.
June 29, 2012 at 09:55 (Fertilizers)
India’s private sector Deepak Fertilisers & Petrochemicals Corporation Limited (DFPCL) is looking at investing about US$ 65 million to expand its NPK complex fertilizers capacity to 600,000 tpa from 229,500 tpa. The complex is located in Taloja. DFPCL agri-business division manufactures 23:23:0 prilled nitrophosphate fertilizers under the brand name Mahadhan and markets them through a network of over 1,000 dealers. Its products include ammonium sulphate, mixtures, seeds, sulphur, micronutrients, bio fertilizers, fruits,
vegetables and pesticides. They are the largest producer of Technical Ammonium Nitrate (TAN) in India. They have captive ammonia production and in the fertilizer year 2010-2011 they increased its volume by about 50 percent to over 150,000 tonnes. DFPCL was incorporated in 1979 and its plants are located at Taloja, near Mumbai, Western Maharashtra.
The financial sector of the company is problematic due to higher raw materials costs and planned plant shutdowns, and operating margins have declined every quarter in the last fiscal year. Nevertheless new projects, including the one above mentioned, make the company to intend to expand in the next five years its revenue by five times through its diversified portfolio.
June 28, 2012 at 09:48 (Fertilizers, Phosphate Fertilizers)
Vietnam phosphate-based manufacturers include Lam Thao Fertilizer and Chemicals JSC (capacity of 880 thousand tonnes per annum), Long Thanh Super Phosphate Company (capacity of 180 thousand tonnes per annum), Ninh Binh Phosphate Fertilizer JSC (capacity of 300 thousand tonnes per annum), and Van Dien Fused Magnesium Phosphate Company (capacity of 300 thousand tonnes); together they can almost satisfy domestic demand. Vinachem has recently started the construction of a new phosphate fertilizer (DAP) plant, with a nameplate capacity of 330,000 tpa. Sulphuric acid production will be based on MECS – U.S. technology, phosphoric acid production technology of Prayon/SNC – Lavalin, Belgium; DAP production technology of INCRO – Spain. The plant will be completed and put into operation after two years. The main feedstock will come from Lao Cai apatite ore. This is the second DAP plant of Vinachem in Vietnam, using Lao Cai apatite. The two plants will increase the domestic DAP fertilizer output to 660,000 tpa, basically meeting the domestic demand.
In Vietnam, rice production uses the highest application of fertilizers. Of the three yearly crops, that of the winter/spring season is the largest, when the use of fertilizers is always higher than during the other seasons. Geographically, the Mekong River Delta and southeastern region, accounting for 65.4 percent of total land used for agricultural production, is Vietnam’s biggest fertilizer market.
June 25, 2012 at 09:46 (Fertilizers, Phosphate Fertilizers)
Chennai-based Murugappa Group, one of India’s leading business conglomerates, is planning to expand its fertilizer business, including a 800,000 tpa SSP plant at Bhatinda, Punjab. This will take its total fertilizer production capacity to about 4 million tonnes. The Murugappa group company was incorporated in 1961 and launched its operations in 1964 by starting its first fertilizer plant in Visakhapatnam, in Andhra Pradesh.
June 14, 2012 at 05:51 (Fertilizers, Potash Fertilizers)
Canada-based Lara Exploration Ltd. has signed an Option Agreement with Australia-based Aguia Resources Limited, whereby Aguia may pay US$100,000 and issue up to 15 million shares to Lara and carry out US$1.5 million of exploration within two years of the renewal of certain of the exploration licenses to acquire a 100% interest in Lara’s Sergipe Potash Project in northeast Brazil. Lara is engaged in identification, acquisition and exploration of precious and base metal deposits and other resource opportunities in South America; it holds a diverse portfolio of prospects and deposits in Brazil, Peru, Colombia and China, including also the Boyaca Phosphate Project.
Under the terms of the agreement, Aguia will issue 4 million shares (which will be subject to a 12 month hold period) to Lara upon publication of the extension of certain of the exploration licenses and carry out exploration of at least US$1.5 million in exploration expenditures by the first anniversary of the Extension Date. The exploration must include at least one drill hole to test the known potash horizons within the Property (to a depth that will result in the targeted Ibura Member of the Muribeca Formation being fully tested). Such exploration is a firm commitment and not optional unless Aguia pays $1.5 million to Lara, but Aguia may terminate the Agreement if the exploration licenses are not extended within 2 years.
Aguia may then issue a further 6 million shares to Lara on or before the first anniversary of the Extension Date to earn a 75% interest in the project. Aguia may issue and deliver a further 5 million shares (free of any restrictions on transfer through the ASX) to Lara on or before the second anniversary of the Extension Date to acquire 100% ownership and control of the project.
Lara’s Sergipe Potash Project comprises 21,483 hectares of exploration licenses located in Sergipe State, northeast Brazil. The licenses are adjacent to and cover the extensions of the potash-bearing sedimentary basins of the Vale owned Taquari-Vassouras mine, which produces about 650,000 tons of potash annually. These license areas have been explored extensively for oil and gas in the past and a database of seismic surveys and exploration drilling is available through the Brazilian National Petroleum Agency. This ANP data includes eight wells drilled within Lara’s license areas, several of which intercepted potash, with the best drilled intercept a cumulative 37.6 meters of potash mineralization in ten separate sedimentary units between 1,710 and 1,806 meters depth. Aguia has approximately 68,700 hectares of licenses including blocks that are adjacent and contiguous with those of Lara in the northern part of the basin and blocks covering southern extensions of the basin. It owns in Brazil the Mata da Corda Phosphate Project.
June 12, 2012 at 10:24 (Industrial News, Industrial Phosphates)
Due to the hindrances that the chemical company Alkimia suffered because of production interruptions, their annual shipments of STPP declined last year 42.76% over the previous year, passing from 143,397 tonnes to 82,076 tonnes. From this last figure, 78,577 tonnes were shipped for export and only 3,499 tonnes were sold for the local market. STPP, sodium tripolyphosphate, is a raw material used mainly in the manufacture of detergents in powder.
The year 2011 was marked by a significant number of forced interruptions of production units following the strikes and social movements in the industrial zone of Gabes and the lack of phosphoric acid. Several renewals and maintenance have been made, namely the replacement of the elevator unit U-600 and the repainting of the entire plant with the breakdown of damaged concrete.
Under pressure from the trade union confederation, the company was forced to abandon the use of subcontracting and embarked on a logic of the entire tenure of the workforce, or 224 workers, over a period of three years.
Despite all the difficulties, Alkimia generated at the end of the year a net profit of 7.467 million dinars, and this mainly due to the significant decline in purchases of supplies consumed going from 129.019 million dinars in 2010 to 94.010 million dinars at the end of 2011.
Ste Chimique Alkimia SA operates a plant in Zone Industrielle de Ghannouch in Gabes, Tunisia, and has a 55% stake in Societe Kimial SPA, based in Annaba, Algeria and a 100% stake in Alkimia Packaging, which is engaged in packaging and marketing of soda ash in Tunisia and North Africa. The main shareholders of the Company are Groupe Chimique Tunisien, with a 39.1% stake and IMER Company, with a 22.12% stake.