Updated to mid-November 2009
European market review by Carl Roache, ICIS pricing
In mid-August 2009, Black Sea urea prices were pegged at $248-250/tonne FOB (free on board) Yuzhny. By mid-September, prices had declined to $234-235/tonne FOB, due to lower feedstock costs and weak demand.
By mid-October prices had moved to $233-240/tonne FOB following substantial buying in India and Pakistan. However, the lack of any demand from Central and Latin America limited the potential run up in prices.
By mid-November, prices had shown a further modest rise to $241-243/tonne FOB, buoyed by demand from countries including Turkey. Producers were sold out for November shipment and were, therefore, maintaining asking prices in the mid-$240s/tonne FOB for fresh deals.
US market review by Frank Zaworski, ICIS pricing
US urea prices strengthened in the three months to mid-November as demand increased in the agricultural sector ahead of the fall application season. In addition, an industrial use of urea for the production of diesel exhaust fluid (DEF) is on the rise.
DEF reduces the nitrous oxide emitted in diesel exhaust.
On 13 November, granular bulk urea in the US Gulf was priced in a range of $266-269/short ton (st) FOB Nola (New Orleans), up somewhat from the range of $255-262/st FOB Nola four weeks earlier.
The higher prices are also a result of low imports in October and November. Yara and Sabic were sold out of urea from the vessels that arrived in October. Sabic has had to reduce the size of its November cargo to 48,000 tonnes due to production losses in Saudi Arabia.
Demand remained strongest in the northern US and southern plains.
Looking ahead, the use of DEF, made from urea, is mandated for use in all large diesel trucks by the US Environmental Protection Agency at an escalating percentage beginning in 2010.
On the supply side, Methanol Holdings Trinidad Limited (MHTL) was in the process of starting up a 1.5m tonne/year urea production facility in Point Lisas, Trinidad. The urea will be used to produce urea ammonium nitrate (UAN) and melamine.
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Urea
Uses and Outlook
Urea is a popular solid nitrogen fertilizer because of its high nitrogen content (46%), with nearly 90% of output going into this application. Most world output is in a solid form, either prills or granules, or crystalline for specialised small-volume uses. In a number of industrialised countries, a growing volume of liquid product is consumed in the production of nitrogen solution fertilizers, and in liquid cattle feeds.
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Urea
Process Technologies
Urea was first produced industrially by the hydration of calcium cyanamide but the easy availability of ammonia led to the development of ammonia/carbon dioxide technology. This is a two step process where the ammonia and carbon dioxide react to form ammonium carbamate which is then dehydrated to urea.
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