Natural Gas Snapshot

Natural gas is a fossil fuel used as a source of energy for electricity generation, heating, cooking, fuel for vehicles, and as a chemical feedstock in the manufacture of plastics and other commercially important organic chemicals. Due to environmental reasons, natural gas is considered as the stepping stone between fossil fuels such as coal and oil, and renewable energy such as water, wind, and solar power. Natural gas reserves are estimated at 187 trillion cubic meters in 2015.

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Mineral Production Used by the Fertilizer Industry









Fertilizer Capacities










North America Giant Fertilizer Merger

Fertilizer prices have been falling in the recent years causing an erosion in the fundamentals of the industry, to which is has responded consolidating.

PotashCorp (POT) and Agrium (AGU) announced a merger of equals expected to be completed by the middle of 2017 that would create the world’s largest crop-nutrient supplier with a market value of about $26 billion. For an understanding of the significance of this new enterprise compare with the market capitalization of Mosaic (MOS) of $8.9 billion or CF Industries (CF) of $5.6 billion.



PotashCorp Allan Potash Operations


This is a deal of giants. PotashCorp is the largest world fertilizer company by nutrient capacity (14.2 million tonnes p.a.) and they are a low-cost potash producer (in the recent quarter they outflanked competition with the lowest cost per ton at $127 of potash produced). Agrium is a leading global producer and marketer of agricultural nutrients with a 4% of the global production capacity of potash, a 2% of ammonia, a 1% of urea, and 1% of phosphate. Agrium’s retail unit buys 10 million tons of fertilizer annually. The combined company would control the majority of North America’s potash production and more than 30 percent of North American nitrogen and phosphate production.



Agrium Vanscoy Potash Operations


The new company will be a leader in the fertilizer industry with close to 20,000 employees and operations and investments in 18 countries. PotashCorp shareholders will own 52% of new company.

The merger will result in low regional market overlap as the majority of PotashCorp fertilizer assets are in the eastern half of the U.S., Agrium’s nitrogen and phosphate assets are concentrated in western North America.  It is expected to generate up to US$500 million of annual operating synergies mainly from distribution and retail integration, production and SG&A optimization, and procurement.

The merger of the world’s largest fertilizer producer with the world’s largest ag-retailer is drawing the attention of the regulators and farmer groups.

Fertilizer Consumption Snapshot













Lithuania: Plans for food-grade phosacid production

EuroChem Group 100% owned company Lifosa plans to invest approximately 75 million euros in the production of food-grade phosphoric acid.

The Kedainiai headquartered company was founded in 1963 and deals with the production and wholesale of nitrogen-phosphorus fertilizers, feed phosphates, and aluminum fluoride.

Lifosa netted a profit of 61.617 million euros last year, up by 35.2% from 45.579 million euros in 2014. Its sales revenue rose by an annual 18.3% to 412.687 million euros.

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Russia: Uralchem increased phosphate processing

Despite the weak global fertiliser demand, Russian producer Uralchem, one of the world’s largest ammonia and nitrogen fertilisers producer, is increasing its phosphoric acid production by the end of 2016. The ramp-up is part of the group’s long-term strategy to reinforce existing market share.  Following the reopening of its Voskresensk Mineral Fertilizers business, Uralchem quadrupled MAP output in the first half of the year despite the current “complex global market”. Average MAP and DAP (FOB Baltic Sea) prices for the first three months of 2016 were $353/tonne and 366$/tonne, respectively, trailing their first quarter 2015 average prices by 27%for MAP and 25% for DAP.

Fertilizer Prices


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