A M E R O P A Fertilizers presentation for ASBA Cargo Conference in Miami FL 28 Sept 2017
Overview What are Chemical (N P K) Fertilizers? Fertilizer Market Outlook to 2021 (Supply and Demand) Global Fertilizer Trade Conclusion Q & A 2 Ameropa Fertilizers
What are Fertilizers? Fertilizers are materials of natural or synthetic origin that are applied to soils to provide nutrients essential to the growth of plants. Nutrients are taken out of the soil by the growing crops and need to be applied regularly. Fertilizers are essential to meet worldwide food demand. 3 main macronutrients: Nitrogen (N): growth and development of the plant Phosphates (P): enhance photosynthesis process and development of plant roots and stems Potash (K): increase plant s resistance to crop disease and tolerance to drought, frost and salinity as well as seed maturation and fruit quality Other secondary macronutrients (Calcium, Magnesium, Sulphur) and micronutrients (Copper, Iron, Zinc, Boron, Manganese, Nickel, etc.) 3 Ameropa Fertilizers
What are Fertilizers? Physical forms: solid particles, fluids, and pressurized gas (anhydrous ammonia). Important is that fertilizers can be spread or applied evenly in the field. Packing: in bulk or bags Application: By spreading machines in developed agricultural markets and by hand in lesser developed agricultural markets Season: Main fertilizer season is at the beginning of the spring season in each hemisphere when crops start to grow. Certain crops can also be planted during autumn season of each hemisphere. In some equatorial countries the application season for fertilizers is all year round. Main crops: wheat, corn, rice, fruits and vegetables, oilseeds 4 Ameropa Fertilizers
What are Nitrogen Fertilizers? Nitrogen Fertilizers are made from Ammonia. Ammonia (NH3) is produced by the Haber-Bosch process, an energy-intensive process with natural gas (or coal) supplying hydrogen and nitrogen deriving from the air. Main Nitrogen Fertilizer Products: Urea (46% N), Ammonium Nitrate AN (34% N), liquid Urea-Ammonium Nitrate Solution UAN (32% N), Calcium Ammonium Nitrate CAN (27% N), Ammonium Sulphate AS (21% N) Main Origins Middle East China FSU North Africa S.E. Asia Main Destinations India Latin America North America Europe S.E. Asia Urea main Nitrogen fertilizer 5 Ameropa Fertilizers
What are Phosphate Fertilizers? Phosphate Fertilizers are obtained by extraction from minerals, mostly referred to as phosphate rock. Main Phosphate Fertilizer Products: Diammonium Phosphate DAP (18-46-0), Monoammonium Phosphate MAP (11-52-0 or 11-50-0), Single Superphosphate SSP (18-22% P2O5), Triple Superphosphate TSP (44-48% P2O5), Various NPKs Main Origins China North Africa North America FSU Middle East Main Destinations Latin America India / Pakistan Europe North America Australia Dark DAP (Diammonium Phosphate) 6 Ameropa Fertilizers
What are Potash Fertilizers? Potash is a obtained by extraction of potassium minerals from the rock. Main Potash Fertilizer Products: Potassium Chloride MOP (60-62% K2O), Potassium Sulfate SOP (48-52% K2O) Main Origins Russia/Belarus Canada Israel Germany Spain Main Destinations China India Latin America North America Malaysia/Indonesia 7 Ameropa Fertilizers
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Outlook (Supply): Nitrogen & Urea (N) Capacity in China 2000-2021 Massive reduction of ammonia and urea capacity, but capacity in large plant segment still increasing. Ammonia capacity static at 72 Mt NH 3 from 2017 to 2021 70 Mt N 60 50 40 30 20 10 0 S&M CL LRG CL LRG NG LRG OT + 6 Mt -6 Mt 90 80 70 60 50 40 30 20 10 0 Mt urea Large S&M Segment Urea capacity : -6 Mt and +6 Mt = Flat at ar. 74 Mt from 2016 Sources: CICCC, CNFIA, IFA Production and International Trade, June 2017 8 Ameropa Fertilizers
Outlook (Supply): Urea (N) Capacity Developments to 2021 223 225 226 226 Mt urea 217 Urea : 55% of N production and 2/3 of ammonia capacity +1.4 Mt in EECA 40 new units, of which 10 in China 210 208-6.0 Mt of China capacity +2.6 Mt in Africa +1.1 Mt in West Asia +4.2 Mt in USA +3.0 Mt in India +3.0 Mt in Nigeria +2.7 Mt in East Asia Other increases (EECA, LA) -1.0 Mt in China But more than 10 Mt of potential capacity in the pipeline after 2021 : India, Nepal, USA, Africa, Russia, Uzbekistan, Malaysia, Iran.. 2016-2021 : + 17 Mt (+8%) 226 Mt in 2021 90% in 2016-2018 NA + EECA + EA + AF + LA 2015 2016 2017 2018 2019 2020 2021 Source: IFA Production and International Trade, June 2017 9 Ameropa Fertilizers
Outlook (Supply): Phosphates (P) Capacity Developments to 2021 ~25 new granulation units Global PP capacity growing 16% from 96 Mt products in 2016 to 111 Mt in 2021 Mt Products Morocco 9 Mt to 18 Mt Saudi Arabia 3.5 Mt to 6 Mt China 39 Mt to 42 Mt Large planned expansions up to 2021 Source: IFA Production and International Trade, June 2017 Plus a few on-going capacity projects 10 Ameropa Fertilizers
Outlook (Supply): Potash (K) Capacity Developments to 2021 Global Potash capacity growing 20% from 54.6 Mt K 2 O in 2016 to 65.5 Mt K 2 O in 2021 Mt MOP eq Total Expansions: 12 Mt K 2 O Net Expansion : 11 Mt K 2 O 92 12.3 Mt MOPeq 7.2 Mt MOPeq Reduction in Europe 2/3 of increment in 2017-18 O T 1.1 EECA 7.2 NA 4.0 O T 1.2 EECA 6.0 New producers Turkmenistan 2017 Russia 2018-20 Capacity 111.2 Mt products in 2021 Source: IFA Production and International Trade, June 2017 11 Ameropa Fertilizers
Outlook (Demand): Worldwide close to 200 Mt by 2021/22 220 200 180 160 140 120 100 80 60 40 20 0 Mt nutrients Base year 182 Evolution of Global Fertilizer Demand K20 P205 N 31,4 33,3 33,5 34,6 35,4 36,3 37,1 37,8 38,4 42,1 43,2 43,7 44,9 45,3 46,1 46,7 47,4 48,1 104,8 102,9 104,2 106,3 107,3 108,7 109,9 111,1 112,4 Source: IFA Agriculture, May 2017 199 Average Annual Change Base Year 2021/22 N +1.2% p.a. P 2 O 5 +1.5% p.a. K 2 O +2.1% p.a. Total +1.5% p.a. 12 Ameropa Fertilizers
Outlook (Demand): Lat.Am., Africa and E.Eur.&C.Asia Increasingly Influent Anticipated Regional Volume Expansion by 2021/22 Anticipated Relative Regional Growth by 2021/22 Lat. Am. & Carib. South Asia East Asia Africa E. Eur. & C. Asia North America West Asia Oceania W. & C. Europe N P2O5 K2O Source: IFA Agric ulture, M ay 2017-1 0 1 2 3 4 5 Mt nutrients Africa E. Eur. & C. Asia Lat. Am. & Carib. South Asia West Asia East Asia Oceania North America W. & C. Europe Source: IFA Agriculture, May 2017 0% 10% 20% 30% 40% 13 Ameropa Fertilizers
Outlook (Supply & Demand): 2016-2021 Nitrogen Mt N Supply: +1.8% pa Demand: +1.2% pa Potential surplus rising up to 10 Mt N 170 160 150 140 130 166 167 167 163 160 166 154 154 156 150 152 146 148 2016 2017 2018 2019 2020 2021 60 55 50 45 40 50 50 51 52 51 48 47 47 48 49 47 45 46 2016 2017 2018 2019 2020 2021 P Acid Mt P 2 O 5 Supply: +2.4% pa Demand: +1.8% pa Potential surplus nearly doubling Potassium Mt K O 2 Supply: +3.8% pa Demand: +2.2% pa Potential surplus more than doubling Sources: IFA Agriculture, IFA Production and International Trade, June 2017 60 55 50 45 40 35 30 52 52 53 49 52 46 44 46 44 45 43 41 42 2016 2017 2018 2019 2020 2021 14 Ameropa Fertilizers
Global Fertilizer Trade: Regional Nutrient Balances in Million metric tons nutrient, 2016 20.0 15.0 10.0 Africa North America 11.4 Latin America 10.4 West Asia South Asia East Asia West/ Central Europe East Europe/ Central Asia 15.8 11.8 Oceania 5.8 N 5.0 2.7 2.1 3.2 1.9 3.3 2.5 P K 0.0-5.0-0.8-3.5-1.0-5.0-5.5-6.0-3.4 0.2-1.6-1.8-2.1-0.5-0.4-1.3-10.0-7.5-7.9 15 Ameropa Fertilizers
Global Fertilizer Trade: Flow Map 16 Ameropa Fertilizers
Global Fertilizer Trade in Relation to Production in 2016 In Mmt Ammonia Urea AS Nitrates UAN Phosphate Potash Capacity* 217.7 220.3 30.6 92.1 37.0 80.0 110 Production* 181.3 177.8 24.6 62.1 21.4 65.4 64.5 Trade* 18.3 49.7 12.3 17.9 7.3 29.3 47.6 Seaborn** 36.4 21.3 29.8 Source: * IFA / ** Clarksons Research Aug-17 17 Ameropa Fertilizers
Global Fertilizer Trade: Seaborn (Dry Bulk) In Mmt 2014 2015 2016 exp.2017 Growth 16/17 Urea 38.5 39.2 36.4 39.5 8% Phosphates 20.3 20.5 21.3 22.2 4% Potash 34.5 31.7 29.8 33.2 12% Sulphur 30.8 33.4 33.7 33.7 0% Phosphate Rock 29.5 29.8 28.8 31.7 10% Total Fertilizers 153.6 154.6 150.0 160.3 7% For Comparison: Total Minor Bulk trade in 2016: 1,864 Mmt and expected to grow 2% in 2017 to 1,899 Mmt Total Major Bulk trade in 2016: 3,035 Mmt and expected to grow 5% in 2017 to 3,180 Mmt (out of which Grains are 2016: 481 Mmt and expected to grow 6% in 2017 to 510 Mmt) Source: Clarksons Research, Aug-17 Dry Bulk Trade Outlook, Volume 23., No. 8, August-2017 18 Ameropa Fertilizers
Conclusion Seaborn Fertilizer Trade jump of 7% (10 Mmt) this year is exceptional Supply driven Fertilizer Market with slower growth (av. 1.5%) towards 2021 Different Global Fertilizer trading pattern emerge due to: - even more capacity coming on stream over next two years - North America still a net importer on N Fertilizers but much less volume - strategic aim of some countries to become self-sufficient (e.g. India) - China may change from an exporter to a net importer on N Fertilizers Traditional Trade Routes for Seaborn Fertilizers are changing 19 Ameropa Fertilizers
AMEROPA: an Independent Trading House for Grains, Fertilizers and Chemicals Family owned Group successfully operating since 1948 from Switzerland Main focus on global commodities trading, marketing and delivery - 12 million tons p.a. Fertilizers and Chemicals - 15 million tons p.a. Grains, Oilseeds and Feedstuff Broad market presence (more than 100 locations in 30 countries) Robust auxiliary infrastructure in originating, storage and distribution Equity participations in production + processing to support the Group s trading operations For more information, please visit our website at www.ameropa.com 20 Ameropa Fertilizers Thank you for your attention!