Ammonia Snapshot

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Brief Urea Update

Urea Production and Exports

 

Urea Consumption 2015

Urea Production 2015

Urea Exports 2015

Urea Imports 2015

Urea Prices

Fertilizer Capacities

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Urea Fertilizers Snapshot

Urea, N-P-K composition 46-0-0, is the most commonly produced and widely traded nitrogen product. It is estimated that 90 percent is used as fertilizer and the rest for industrial purposes. Synthesized from ammonia and carbon dioxide (CO2), urea is the only primary nitrogen product chemically classified as organic (because of its carbon content). Nitrogen is the most crucial and major nutrient element in plant growth. It is abundant in nature and enhances better yields.  Because urea is produced from ammonia and carbon dioxide, which is a by-product of ammonia production, all urea plants are located adjacent to or in proximity to an ammonia plant.

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China and India account for more than a half of urea output (as well as capacity), however, these two countries are the largest urea consumers, over half of it. In 2013, 44 percent of the urea fertilizer was consumed in East Asia, followed by South Asia, which took nearly a quarter of the product.

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Urea, (Black Sea), bulk, spot,  f.o.b. Black Sea (primarily Yuzhnyy) beginning July 1991; for 1985-91 (June) f.o.b. Eastern Europe

Wheat (US), no. 1, hard red winter, ordinary protein, export price delivered at the US Gulf port for prompt or 30 days shipment

Urea Fertilizers Snapshot

Urea, N-P-K composition 46-0-0, is the most commonly produced and widely traded nitrogen product. It is estimated that 90 percent is used as fertilizer and the rest for industrial purposes. Synthesized from ammonia and carbon dioxide (CO2), urea is the only primary nitrogen product chemically classified as organic (because of its carbon content). Nitrogen is the most crucial and major nutrient element in plant growth. It is abundant in nature and enhances better yields.  Because urea is produced from ammonia and carbon dioxide, which is a by-product of ammonia production, all urea plants are located adjacent to or in proximity to an ammonia plant.

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China and India account for more than a half of urea output (as well as capacity), however, these two countries are the largest urea consumers, over half of it. In 1912, more than forty percent of the urea fertilizer was consumed in East Asia, followed by South Asia, which took nearly a quarter of the product.

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Nitrogen Fertilizers Snapshot

Nitrogen is the most crucial and major nutrient element in plant growth. It is abundant in nature and enhances better yields.


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Because of its high nitrogen content (46%), urea is the most popular form of solid nitrogen fertilizer, particularly in the developing regions of the world, and is traded widely in the international market. More than 40% of all food grown in the world is fertilized by urea. Growing faster than dry nitrogen-containing fertilizers, nitrogen solutions are mostly used in the United States and Western Europe.

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China is the largest consumer and producer of nitrogenous fertilizers, it is the main factor shaping the nitrogen market. Global nitrogen demand has strengthened significantly during the second half of 2012 and into 2013, balancing the strong increase in supply from China.

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Nitrogen products are manufactured from anhydrous ammonia, which is most commonly synthesized from natural gas, steam and air.

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The highly competitive nature of this market makes nitrogen fertilizer prices relatively volatile.

Urea Prices

India: Customized Fertilizer Plant in Ahmednagar

The State Government-controlled Maharashtra Agro Industries Development Corporation Ltd (MAIDC) would be the lead project manager in the setting up a customized fertilizer plant in the Ahmednagar district, the largest of the Maharashtra state in western India, on a public-private partnership basis.

Customized fertilizers are prepared by enriching regular fertilizers like urea, DAP and potash with micro nutrients (sulphur, zinc, and boron); they are customized for specific soil, crop and water conditions. Although they are 40 to 50 per cent more expensive than regular fertilizers, they tend to increase crop yield by up to a 100 per cent.

MAIDC is already manufacturing granulated mixed fertilizer and pesticides. They will first set up a pilot plant with an investment of about US$ 9.1 million. Depending on whether it is successful or not, the project would be scaled up eventually.

Years of intensive agriculture using standard fertilizers has reduced soil fertility. Customized fertilizers is one of the solutions for gaining back soil health. All major fertilizer players have announced plans for setting up customized fertilizer plants. Tata Chemicals has taken the lead by setting up a facility for manufacturing customized fertilizers with an annual capacity of 1.3 lakh tonnes at Babrala in Uttar Pradesh.

Unites States: Egyptian OCI Plans a New Nitrogen Fertilizer Plant

Egyptian-based Orascom Construction Industries (OCI) wants to build a new nitrogen fertilizer plant on 318 acres of farmland along old U.S. 6 near Walcott, although they are also looking at three other Iowa sites – Lee County, Middletown and Clinton – as well as a site in central Illinois near Pekin. The plant would be built by Orascom’s subsidiary Iowa Fertilizer Co., would be its second United States fertilizer plant. In 2011, Orascom purchased Pandora Methanol LLC in Beaumont, Texas. The plant was renamed Orascom Beaumont and produces methanol and ammonia.

OCI is a leading international fertilizer producer and construction contractor, which traces its roots to a small family-run construction business, but today it is one of Egypt’s largest corporations with projects and investments across Europe, the Americas, Asia, the Middle East and North Africa. It operates five fertilizer production sites in the United States, Egypt, the Netherlands and Algeria, producing 7 million metric tonnes per year of nitrogen, 0.75 metric tonnes annually of methanol and 0.25 metric tonnes annually of melamine. They are active in 25 countries across the globe, employing 72,000 people worldwide and about 13 percent of its stock is owned by United States investors. The company has plans to split its construction and fertilizer businesses into two companies, a move approved unanimously by its shareholders last May. In addition to the proposed Midwest project, the company’s Fertilizer Group began production in May at a new plant in Sorfert, Algeria. It also has a proposed greenfields facility under development in Brazil. As of December 31, 2011, the Company’s subsidiaries and jointly controlled entities included OCI International-Cyprus and OCI Finance Limited, among others.

The USD 1.3 billion fertilizer plant being proposed by OCI would be the first new United States nitrogen plant built in decades and comes at a time when domestic production – but not demand – has dropped dramatically. The natural gas prices increases caused the United States nitrogen loose about half their capacity between 2000 and 2008. The cost of natural gas represents 70 to 90 percent of the cost of manufacturing nitrogen, and some plants were even dismantled and send them to places like China. But the fundamentals of the fertilizer industry are sound (in the United States alone the fertilizer business is estimated to be a USD 15 billion industry) and the demand for nitrogen has not declined, resulting in a significant rise in imported nitrogen.

In previous times, the natural gas prices reached a peak as high of USD 11 per million metric British thermal units, but now they are in the range of USD 2 and USD 2.50 and half of the United States nitrogen consumption is imported. So the OCI investment plan has a sound economic logic.

India: Oman was the biggest supplier of urea in 2011-12

Whilst in 2010-11, China was India’s biggest urea supplier, accounting for nearly 38 per cent of its total imports, in the 2011-2012, the main supplier was Oman which provided about one-third the imports. The weighted average cost of India’s urea imports in 2011-12 was US$ 481.74 per tonne, which was up about 47 per cent over the previous year. This translates into total urea imports of US$ 3.77 billion.

India’s urea imports increased 18.5 per cent during the fiscal year 2012 vis-à-vis the previous fiscal. Most of the imports from Oman were through India’s long-term off-take agreement with Oman India Fertiliser Company, a joint venture between Oman Oil Company SAOC, IFFCO and Kribhco. Iran was India second-biggest supplier, followed by China. Iran accounted for 25.5 per cent of the urea imports, while China provided another 16.3 per cent.

India: NFCL New Urea Project

Hyderabad-based Nagarjuna group fertilizer company Nagarjuna Fertilizers and Chemicals Ltd (NFCL) is planning to expand its fertilizer facility in Kakinada, Andhra Pradesh, by setting up a 1.3 million tonne per annum brownfield urea project. This will take up the total capacity of the Kakinada plant to around 3 million tonnes per annum. The Kakinada facility currently has two plants making urea and ammonia with. The new expansion facility is slated to come up within the existing complex and NFCL is planning to invest over US$ 0.91 billion in the setting up of the new urea plant.

The company is already understood to have sought a 2.4 mmscmd (million metric standard cubic meters per day) gas allocation for the expansion project by 2014-15 and has applied for the necessary approvals for the same. NFCL, the flagship of Nagarjuna group that was set up in 1986-87, manufactures and markets plant nutrients under the Nagarjuna brand, and they are the single largest private sector investment in southern India. NFCL has also signed a MOU (memorandum of understanding) with Nigeria, which is Africa’s biggest oil producer and has the continent’s largest gas reserves, to build petrochemical and fertilizer plants in the southern Delta state and in Lagos, the commercial capital.

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