North America Market Overview

Transcription

1 North America Market Overview Ryan Monis

2 Agenda IHS Markit Chemical Ammonia Urea AN, UAN and AS DAP and MAP Slow and Controller Release Fertilisers Conclusions

3 IHS and Markit are now IHS Markit IHS Markit thinks about the world in a unique way. We call this The New Intelligence. IHS Markit s singular ability to look across complex industries, financial markets, and government actions that drive the global economy and provide our customers with insights, perspective and solutions for what really matters. Financial Markets Energy Chemical Automotive Aerospace, Defense & Security Product Design Technology, Media & Telecom Maritime & Trade 3

4 North American trends for Ammonia The United States accounted for 6.0% of world capacity in 2016, up from 5.6% in Capacity declined more than 22% (or 1.6%. annually) during , but is projected to increase by nearly 8.7% annually during , driven by - increased availability of natural gas - resulting lower prices, from shale oil development.

5 Ammonia end use in North America

6 North American trends for Urea The United States accounted for 4.0% of total world urea capacity in 2016, slightly up from 3.8% in US capacity declined by 34% between 2000 and 2009, as a result of high natural gas prices significantly reduced the competitive viability of the US nitrogen industry, and increased consumption in other regions. Capacity increased by over a third from 2009 levels in 2016, and is forecast to increase by over 10% per year during due to declining natural gas prices resulting from increased exploration and production of natural gas from shale oil.

7 Urea end use in North America

8 What is behind the supply push in North America?

9 North American urea trade and trade prospects: Local supply displacing Trinidad???

10 China as a urea exporter? Lessons for the USA China has added lots of capacity in the past 20 years or so, to the point of switching to become a significant exporter of ammonia and urea in One market that has become a big exporting region for Chinese urea, is India, but India has drastically reduced its imports from China, seemingly switching to Middle eastern producers

11 Chinese Urea trade drastically down from peak in 2015 Reasons given for struggling urea: High production costs High logistics costs High fees and taxes India importing lower volumes Suggestions from CNFA in 2016: remove tariffs on fertiliser exports and phase out outdated fertiliser plants this happened in 2017, but was not enough to reverse the trend YTD (June 2017) urea exports are down by 35%

12 Chinese Urea trade drastically down from peak in 2015 Reasons given for struggling urea: High production costs High logistics costs High fees and taxes India importing lower volumes Suggestions from CNFA in 2016: remove tariffs on fertiliser exports and phase out outdated fertiliser plants this happened in 2017, but was not enough to reverse the trend YTD (June 2017) urea exports are down by 35% And no route to find alternative markets in North America

13 AN, UAN, and AS The AN production in the USA accounted for around 15 percent of total world production, with fertiliser and explosives being nearly equally split Nitrogen solutions have been used almost exclusively as nitrogen fertilizer materials. The United States ranks first, accounting for 32.7% of estimated world UAN capacity in US capacity Increased a little over 11% between 2000 and With new projects being slated to start up in the near term, capacity is expected to grow by 14% The United States is a large producer, consumer, and exporter and a minor importer of AS accounted for 10.1% of world ammonia sulfate capacity in 2015, and was ranked third, just behind China and Western Europe. Ammonium sulfate is used almost exclusively as a fertiliser material and is valued for both its sulfur content and its nitrogen content

14 MAP and DAP. The United States had the world s largest solid ammonium phosphate capacity until 2007, when it was surpassed by China. China has been expanding its ammonium phosphate capacity to meet domestic demand, while in the United States, capacity has been on decline The most common diammonium phosphate (DAP) product is commonly referred to as (i.e., 18% N; 46% P 2 O 5 ; 0% K 2 O) Common commercial monoammonium phosphate (MAP) grades are 11-(51-55)-0, and Other product grades (e.g., ) are inprocess combinations of MAP and ammonium sulfate.

15 DEF not a fertiliser but growing end use Urea demand into Diesel Exhaust Fluid (DEF), is expected to grow by nearly 9 percent between 2016 and 2026, although from a low base. Urea can meet the new near-zero NOx emission requirements imposed by the US EPA and Western Europe, while at the same time achieving 3 to 5 percent greater fuel efficiency

16 Slow and Controlled-Release fertilisers are forms of Enhanced Efficiency fertilisers (EEFs) Measured nutrient uptake can be achieved through modification of fertiliser products either chemically to reduce their solubility or physically e.g. by coating encapsulation. These types of fertilisers are known as slow- and controlled-release fertilisers: - Slow-release fertilisers (SRF) allow for slow nutrient release to plants via production of materials with controlled- or low-water solubility. Produced by reacting urea with various aldehydes such as urea formaldehydes (UFs), methylene ureas (MUs) and isobutylidine diurea (IBDU). - Coated products such as S-coated urea (SCU) and polymer-coated products are known as controlled-release fertilisers (CRF.

17 China biggest SCRF market, followed by NAM

18 Benefits and Drawbacks of CRF and SRF Significant savings in labour, energy and time. Reduce toxicity in plants caused by the quick dissolution of nutrients and high ionic concentrations in the soil. Reduce nutrient losses preventing nitrate leaching and evaporative losses of ammonia. Main drawback is price considerably higher than conventional fertilisers. The relative high cost/benefit ratio has restricted the use of these products to nonagricultural sectors and high value specialty crops, particularly in European and North American markets.

19 In the USA, coated fertilisers account for more than half of the demand

20 End uses in the USA for SRF/CRF

21 Conclusions North American recent fertiliser developments are changing the global trade Trade from e.g. Trinidad or China will need to find new destinations as the USA becomes more self-reliant Chinese N-fertilisers face headwinds due to overcapacity and competition in the international market from Middle Eastern production North American dominance based on market size, infrastructure Market for NPK, NPK+, SRF and CRF growing globally

22 Thank you