Fertilizers

HOUSTON (ICIS)–The Fertilizer Institute (TFI) said it is extending a sincere thanks to US President Donald Trump for including potash alongside critical minerals in the most recent executive order titled “Immediate Measures to Increase American Mineral Production.” The industry group said this designation sets into place a framework to ensure that potash and other national critical mineral resources are leveraged to create jobs and fuel American prosperity. For fertilizers it will help ensure a stable and abundant supply, which are critical to maintaining global competitiveness of US farmers, strengthening rural economies and keeping food prices in check. “Originally included in the first list of Critical Minerals created in 2018 under President Trump’s first administration, potash’s omission from the 2022 list was a mistake that a broad coalition of industry and consumer advocates have been working to remedy,” said Corey Rosenbusch, TFI president and CEO. TFI noted that 98% of annual US potash consumption comes from imports. Despite having natural reserves, the U.S. only accounts for 0.2% of global supply. There are additional seams that remain unmined due to regulatory uncertainty that has resulted in delayed permitting. Part of the regulatory uncertainty stems from a lack of clarity on potash’s critical mineral status. “We look forward to continuing to work with the Trump Administration on actions that will promote a strong and resilient fertilizer industry that supports U.S. agriculture and ensures affordable food prices for American families,” Rosenbusch said. “This includes continued engagement with the United States Geological Survey (USGS) with the goal of expanding on the executive order to ensure the permanent recognition of both potash and phosphate in their rightful place on the Critical Minerals list.”

21-Mar-2025

TORONTO (ICIS)–Canada’s central bank will work to ensure that US tariffs, and Canada’s reciprocal duties, will not turn into an inflation problem, the bank’s governor said during a webcast event on Thursday afternoon. Monetary policy cannot solve a trade conflict Tariffs to impact oil, farming, manufacturing Tariffs are a structural change that needs a structural response While the tariffs will slow Canada’s GDP growth and raise prices, the tariff-induced direct price increases must not be allowed to spread into “ongoing generalized inflation”, Tiff Macklem, governor of the Bank of Canada, said in a speech to the Calgary economic development agency in Alberta. US tariffs on Canadian exports will be paid by the US company buying those goods, and the company will pass at least some of the cost onto the US consumer, Macklem said. However, the same goes for the retaliatory tariffs Canada imposes on goods imported from the US, he said. As such, higher tariffs will raise prices, causing inflation to rise for a period as the upward pressure on prices from higher costs will outweigh the downward pressure from a weaker economy, he said. Businesses have already lowered their sales outlooks, notably in manufacturing and sectors that depend on consumer spending, he said. Companies are also holding back on investment plans. “Businesses are telling us they are delaying or cancelling investments and scaling back on hiring,” Macklem said. However, as Canadians worry about trade uncertainty, “we don’t want them to have to worry about inflation as well”, he said. What the bank can and must do is ensure that higher prices from a trade conflict do not become ongoing inflation, he said. “We are committed to maintaining price stability over time,” he said, adding: “There should be no uncertainty about that.” The tariffs and resulting uncertainties will – if maintained – particularly hurt certain sectors and regions in Canada, he said. ENERGY For oil-rich Alberta province, the impact on the energy industry from a 10% US tariff is “a major concern”. At the same time, however, the tariffs are also “a big issue” for US Midwest refineries that have invested in equipment to refine heavy Canadian oil, he said. About 94% of Canadian crude oil exports go to the US, mostly through north-south pipelines, he said. The launch of the Trans Mountain oil pipeline expansion last year increased access to overseas markets for Canadian oil, and new export capacity for liquefied natural gas (LNG) is due to come online, he noted. These capacities would help to diversify markets for Canadian energy exports, he said, but also pointed out that these investments are designed to increase Canada’s export capacity – not replace US demand, he said. FERTILIZERS Although the US has temporarily exempted fertilizers, including potash, from tariffs, “uncertainty remains,” he said. With spring seeding to begin soon, farmers on both sides of the border are already feeling pressure from low grain prices, he said. US farmers import potash from Saskatchewan to add potassium to their soil, while Canadian farmers often need US phosphate to fertilize their crops, he said. Canadian farmers also buy machinery and equipment from the US, he said. He also noted that China has imposed a 100% tariff on Canadian canola, effective 20 March, in retaliation for the 100% tariff Canada placed on electric vehicles (EVs) from China. China is the top market for Canadian canola, with an export value of close to Canadian dollars (C$) 5 billion ($3.5 billion), he said. ALUMINUM, STEEL Industries in other parts of Canada, particularly in Ontario and Quebec, will be disrupted by the 25% US tariffs on steel and aluminum. In 2024, the US imported about one-quarter of its steel and 40% of its aluminum from Canada, and Canada imported one-quarter of its steel and one-fifth of its aluminum from the US, he said. Those cross-border flows mean these sectors will be hit by both US tariffs and counter-tariffs, he said, adding: “It’s going to hurt output and increase prices.” Monetary policy could not target specific industries or regions, he said. “We have one monetary policy for the whole country,” he said. A challenge for the Bank of Canada will be trying to assess by how much tariffs will dent demand, how much of the tariff burden will be passed on to consumer prices, and how quickly the burden will be passed on, he said. A faster pass-through means inflation will rise faster, but it will also come down faster, “provided monetary policy does its job”. “So, we’re watching closely how the costs of tariffs and uncertainty pass through to consumer prices,” he said. “Our mandate is price stability, and low inflation is the best way we can support the economic and financial well-being of Canadians in good times and bad,” he said. While monetary policy “cannot solve a trade war”, the bank could help avoid adding damage to the economy by ensuring that inflation remains anchored at the bank's 2% inflation target, he said. Helping the Bank of Canada will be its co-operation with central banks around the world, he said. Central bank governors meet regularly to exchange information and consult each other, he said. “As central banks, we are all in this together,” Macklem said. STRUCTURAL CHANGE If not resolved, Canada’s tariff conflict with its largest trading partner by far would become a “structural change” that requires a structural solution, Macklem said. High tariffs would put Canada on a permanently lower growth path, he said. “We are going to earn less, we are going to consume less, because we are going to have less income,” he said. One way to at least partially offset the negative structural change caused by the tariff conflict would be “positive structural reform”, he said. Such a reform would include removing the barriers to the country’s interprovincial trade, he said. Despite many attempts over the years, Canada never agreed on interprovincial free trade as in many cases it is easier to trade north to south, rather than across Canada. The barriers between the country's 10 provinces and three territories include actual trade restrictions, as well as different provincial regulations for the accreditation of professionals, Macklem said. With the tariff conflict, Canada may now finally remove its interprovincial barriers, which would increase commerce east-west across the country, he said. This positive structural reform could offset “at least some of the consequences of this very negative structural shock we are facing with the US,” he said. It would, however, be difficult and take time for Canada to try to replace the millions of US consumers it may be losing, he said. While hoping for the best, Macklem did not seem too optimistic about the chances of resolving the tariff conflict with the administration of US President Donald Trump. “There is a certain level of trust that has been broken,” he said, and he noted that “Trump has threatened our sovereignty, repeatedly referring to Canada as the 51st state.” Regarding Canada's upcoming federal election, Macklem said the bank's commitment to low inflation was independent of which political party is in government. Canada’s new prime minister, Mark Carney, is expected to call an election on Sunday (23 March), which will likely be held on 28 April or 5 May, public broadcaster CBC reported on Thursday, citing unnamed government sources. Carney, who took over from Justin Trudeau on 14 March, is a former governor of the Bank of Canada and of the Bank of England. CHEMICAL INDUSTRY Trade group the Chemistry Industry Association of Canada (CIAC) has said that to cope with the tariff challenge, Canada needs a competitiveness framework to attract investment and stimulate economic growth. CIAC wants the government to implement pro-growth tax and regulatory policies; strengthen the country’s infrastructure; improve labor relations to avoid supply chain disruptions; and help diversify and expand Canada’s trade into new markets beyond North America. In chemicals and plastics, the tariff conflict affects about C$115 billion in US-Canada chemicals and plastics trade, according to CIAC. Focus article by Stefan Baumgarten $1 = C$1.43 Please visit US tariffs, policy – impact on chemicals and energy Tumbnail photo of Tiff Macklem, governor of the Bank of Canada; photo source: Bank of Canada

21-Mar-2025

HOUSTON (ICIS)–The Fertilizer Institute (TFI) is recognising US President Donald Trump for signing an executive order, which the industry group said continues his long-standing recognition of the importance of fertilizers to farmers and the domestic agriculture economy. The industry group added that the president’s action ensures that Canadian and Mexican imports of fertilizers that fall US-Mexico-Canada Agreement (USMCA) rules of origin preference status will be subject to no duty while this round of tariffs remains in effect. Additionally, the executive order further establishes that potash imports from Canada and Mexico lacking USMCA preference status will be subject to a reduced import tariff of 10%. There is sentiment a large percentage of the need for potash supply to start spring is already in place, with January imports from Canada higher, which reflects the urgency the fertilizer industry undertook ahead of any trade measures. It is possible fertilizer inventory, especially potash, in some locations can go through the whole season. The wider concern is more over ensuring there is enough product for summer refilling efforts and potential, weather permitting, fall applications after crop harvest is concluded. TFI said this is an important step forward to ensuring a stable and affordable supply of fertilizers which are critical to maintaining the global competitiveness of US farmers, strengthening rural economies and keeping food prices in check. “President Trump has long been supportive of US farmers and rural communities,” said Corey Rosenbusch, TFI President and CEO. “As the important spring planting season kicks off on farms around the country, the president’s recognition of the critical nature of fertilizers will ensure growers have access to the vital crop nutrients that make possible bountiful harvests and profitable grower operations.”

07-Mar-2025

SAO PAULO (ICIS)–Brazilian chemicals players are increasingly concerned about shooting costs in logistics as an already two-month long strike by customs workers is set to continue. – Strikes started in mid-2024 bear no fruit – unions double down – Government may need to act more forcefully to ease flows of special materials – Implementation of new simplified import system could derail if strike prolongs Several rounds of talks between the union representing tax auditors and the government have so far failed to bear fruit. Some chemicals players are already facing trouble with perishable goods or materials which need quick delivery – pharmaceuticals, food products, and the like – and are openly demanding a tougher approach from the government. The trade group Brazilian Association of Distributors of Chemical and Petrochemical Products (Associquim) said to ICIS the long-running dispute will need to differentiate between those perishable goods and the rest, arguing it will fall on the government to be more forceful about the delivery of such goods. For the moment, chemicals players on the plastics transformer side, represented by trade group Abiplast, or production players represented by Abiquim, have not reported significant trouble in their trade. However, Abiquim warned that a prolonged strike could negatively hit the current implementation phase of a new import system which was due to simplify the process and save logistics costs for companies. For the moment, no side is backing down. President Luiz Inacio Lula da Silva’s cabinet is aiming to tighten the state's belt as investors’ worries about the fiscal deficit sent Brazilians assets sharply down by the end of 2024, a situation which is now normalizing. The current strike is just the last industrial action in a long list which started in mid-2024 with smaller strikes. As well as salary demands, the trade union is also asking for better working conditions, including the maintenance and upgrades at the many ageing customs points across Brazil’s wide geography. GOVERNMENT INTERVENTIONIn an interview with ICIS on Friday, the president of Associquim said the strike is already hitting some of the trade group’s member companies. Rubens Medrano said the situation is becoming as critical as likely to require government-mandated work shifts for clearance special goods such as those going into the food or pharmaceutical sectors. “We have chemical products that have to have a special place for storage, for instance, and if too much accumulates in those special storage places, then it will filter down to the end-user, and create a safety problem. It would be good if the government used the inspectors' criteria to release these materials, as they do with essential products,” said Medrano. “Because, after all, these products have an expiration date and require special handling and storage. Our request to the cabinet is that this takes priority, immediately. We understand the strike, they have the right to demand their rights, but we also ask that these particularities are taking into consideration and release critical chemicals.” This cabinet intervention is likely to be needed as the effects of another, larger action by workers filters down to all users. As talks have so far failed to deliver an agreement, the union doubled down on 12 February when it started a two-week “zero clearance period” in which practically no physical inspection is carried out. In fact, earlier in February logistics company Unishipping said the “zero clearance period" may end up causing the need for judicial intervention in all the cases where special materials are involved. “Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services (as perishable cargoes). Judicial intervention may be necessary to ensure the continuity of critical operations on a case-by-case basis,” said Unishipping in a letter to its customers seen by ICIS. In his usually optimistic and conciliatory tone, Medrano said judicial intervention should “be the last resort” to resolve the cases of special materials, adding in his plea for “an understanding among the inspectors” about the key costs associated with delays in deliveries of special materials. For non-special products, delays have been reported but nothing that for the moment has jeopardized production in end manufacturing customers. What is clearly by now, said Medrano, is that it is causing an increased costs for anyone in the import or export market. “Th strike is disrupting the entire logistics about imports, since imports are planned in the long term. But this is not only a logistics problem as we must reorganize them, but also a cost problem: goods stuck in ports means higher costs for the importer,” concluded Medrano. Medrano’s plea echoed those of other manufacturing players, not least transport players who after two months of continued industrial actions are the ones most feeling the pinch. Earlier this week, the trade group Union of Cargo Transport Companies of Sao Paulo State (SETCESP), Brazil’s most industrious, said the strike was causing “significant” disruption. Sao Paulo state is home to the Port of Santos, Latin America’s largest, a key exit and entry point for some chemicals and a wide range of industrial goods, as well as of the fertilizers that are paramount to feed Brazil’s powerful agricultural sector. NEW IMPORT SYSTEM IMPLEMENTATION, CHALLENGEDThe major industrial action among customs workers was called at a time when their jobs are more vital than ever as Brazil implements a new import system which was expected to greatly cut delivery times and save costs for companies. The so-called New Import Process on the Single Foreign Trade Portal was approved by President Luiz Inacio Lula da Silva’s cabinet in 2023, with implementation in three phases, with the third and most critical due to take place in the second half of 2025. While July is still a long way away, the smaller strikes in mid-2024 and the current all-out stoppage by workers have made some players fear the work conflict may not be resolved by then, when customs workers will be more needed than ever if the New Import Process is to be implemented in form and time. In an analysis published in November by the trade group representing the petrochemicals-intensive machinery and equipment sector, Abimaq, the savings for companies under the new system, when fully implemented, was estimated at Brazilian reais (R) 40 billion ($6.8 billion) annually. The savings would come from nearly halving delivery times under the new and more electronic-based system, with the current average of nine days potentially falling to five days. In a written response to ICIS this week, Abiquim said its member companies have so far been spared from a direct hit to their logistics but showed worries that any strike extension going forward could greatly change the picture. “At the moment, we still don’t have data on the number of records of time-consuming import operations, or volumes in tonnes, that could support a more quantitative assessment,” said a spokesperson for the trade group. “What we currently have is more a qualitative concern that the strike extension could impact the implementation of the New Import Process on the Single Foreign Trade Portal, since associated companies are already preparing to process the records in the new model.” Abiplast, the trade group representing plastic transformers, a highly import-dependant sector, said its member companies have so far only reported anecdotal evidence of disruption in non-core business operations, such as the delivery of samples for trade fairs and the like. “However, we may be facing more trouble soon [if the strike extends further]. For now, we have had trouble sending samples for trade fairs or samples for future sales, for example, so that the products can be tested abroad – most of those sending samples have reported a lot of problems to do so,” said Roriz in note sent to ICIS. Finally, a source at Brazil's chemicals distributor Activas said the company has not experienced any significant trouble when importing product. Front page picture: The Port of Santos in Sao Paulo state Picture source: Santos Port Authority  Insight by Jonathan Lopez

28-Feb-2025

SAO PAULO (ICIS)–The two-month strike by workers at Brazil’s federal revenue is causing “significant impacts” on national and foreign trade, with small medium-sized transport operators the most affected, according to a trade group for cargo firms in Sao Paulo state. The Union of Cargo Transport Companies of Sao Paulo and Region (SETCESP) added that the strike has also caused losses in tax collection estimated at Brazilian reais (R) 15 million ($2.6 million). Sao Paulo state is home to the Port of Santos, Latin America’s largest, a key point for trade of some chemicals and a wide range of industrial goods, as well as of the fertilizers that are paramount to feed Brazil’s powerful agricultural sector. LONG RUNNING DISPUTEThe trade union representing tax auditors, the National Association of Federal Revenue Auditors of Brazil (ANFIP), has for months been at odds with Brazil’s government of Luiz Inacio Lula da Silva, demanding better conditions. Intermittent strikes started in mid-2024. As well as salary demands, the trade union is also asking for better working conditions, including the maintenance and upgrades at the many ageing customs points across Brazil’s wide geography. As talks have not borne any fruit, the union doubled down earlier in February, announcing two weeks of so-called “zero clearance period” starting on 12 February, meaning no physical inspections will be performed during this period. SETCESP said the long running strike is already causing havoc among Sao Paulo’s transport companies, in the most industrious of Brazil’s states. “Since November 2024, there are delays in the release of export and import cargo, increasing the average time from one day to up to three weeks. The main impacts are linked to the country's economy, losses to industry, service sectors and end consumers, in addition to the imminent risk of damage to stored products,” said the transport trade group. “For transport companies, vehicles and drivers are stuck in huge queues waiting to be loaded and unloaded, representing a significant increase in their costs. Small- and medium-sized carriers are the most affected, as their cash flow depends on the punctuality of receipt of goods by the final recipient.” SETCESP forecast the situation is “likely to worsen further” when the effects of the “zero clearance period” started on 12 February start to show. JUDICIAL INTERVENTIONIn a letter to customers seen by ICIS, logistics company Unishipping said earlier in February the “zero clearance period” should affect cargoes which demand physical inspections only, reassuring them most of the cargo clearance is automatically performed via electronic system. “Brazil’s Superior Courts have ruled that industrial action cannot entirely paralyze essential public services (as perishable cargoes). Judicial intervention may be necessary to ensure the continuity of critical operations on a case-by-case basis,” added the letter. Government and union re-started talks last week, although the union was not too upbeat about a prompt resolution to the conflict, adding that most of the demands presented in 2024 remained unresolved, and therefore they would feature again in contacts with the government. “Even though [salary] negotiations have been opened for the public service, the Tax Auditors of the Brazilian Federal Revenue Service have not received a salary adjustment, due to the non-compliance with the agreement made with the sector last year,” said ANFIP. “ANFIP is now seeking the government to set up specific and temporary tables to resolve the issue.” Additional reporting by Bruno Menini and Sylvia Traganida 

24-Feb-2025

HOUSTON (ICIS)–Nutrien is anticipating that corn plantings will range between 91-93 million acres with the projected increase combined with a shortened fall application season in 2024, supporting their outlook for strong North American fertilizer demand in the first half of this year. The fertilizer producer said in an earnings release that it feels interest in soybean sowings will be strong as well with their projections for upcoming plantings to range from 84 million acres up to 86 million acres this spring. It noted that global grain stocks-to-use ratios remain historically low, and demand remains strong, providing a supportive environment for ag commodity prices in 2025. Not only is the outlook favourable in the US but also in Brazil as Nutrien said generally favorable soil moisture and stronger crop prices are expected to lead to an increase in safrinha corn acreage by approximately 5%. The company said strong grain and oilseed export demand is supporting grower economics. Looking at potash, Nutrien said global shipments rebounded to approximately 72.5 million tonnes in 2024. They were driven by improved supply and supportive application economics that contributed to increased demand in key markets such as China, Brazil and southeast Asia. The producer is forecasting global potash shipments between 71 million tonnes and 75 million tonnes in 2025. It noted that the high end of the range captures the potential for stronger underlying global consumption and the lower end captures the potential for reduced supply availability. Nutrien said it anticipates possible supply tightness with limited global capacity additions in 2025 and reported operational challenges and maintenance work in key producing regions. For global urea and UAN their prices have increased in Q1 of 2025 and are being driven by strengthening demand in key import markets and restricted supply, including continued Chinese urea export restrictions. The producer said global ammonia prices have recently trended lower due to seasonal demand weakness and the anticipation of incremental supply in the US and export capacity from Russia. It does expect North American natural gas prices to remain highly competitive compared to Europe and Asia, with Henry Hub natural gas prices projected to average between $3.25-3.50/MMBtu for the year. Looking at the US nitrogen supply and demand balance the company expects it to be tight ahead of the spring applications, as nitrogen fertilizer net imports in the first half of the 2024-2025 fertilizer year were down approximately 60% compared to the five-year average. Overall nitrogen demand for the spring season is expected to be strong due to the limited fall ammonia application and the potential uptick in corn acreage. For phosphates Nutrien said the markets remain firm, particularly in North America where inventories were estimated to be historically low entering 2025. It is anticipating that Chinese phosphate exports will see levels like 2024, with total exports ranging between 6 and 7 million tonnes. Currently the situation in India with their tight supply should help push demand higher ahead of their key planting season. “The outlook for our business in 2025 is supported by expectations for strong crop input demand and firming potash fundamentals,” said Ken Seitz, Nutrien president and CEO.

20-Feb-2025

HOUSTON (ICIS)–Fertilizer producer CF Industries expects in the near-term that the global nitrogen supply and demand balance will remain constructive as inventories globally are viewed as being below average, with production economics for the industry’s marginal producers in Europe remaining challenged. The company said in a results announcement that global nitrogen pricing was supported in Q4 of 2024 by positive global demand as well as constrained supply availability due in part to natural gas shortages in Iran and Egypt. There was also China’s impact on the market with their continued restrictions on urea exports. Looking ahead at North America, CF is forecasting average US corn returns above soybeans. The producer said this is due in part to improving corn prices from strong corn exports and lower 2024 yield estimates, which is expected to be positive for corn plantings and nitrogen demand in the region. At this time the company expects US corn plantings in 2025 will be approximately 93 million acres, which falls on the lower end of domestic industry projections of between 93 million and 96 million acres being sowed in the weeks ahead. For Brazil there was an uptick in urea imports in 2024 to 8.3 million tonnes, which was 14% higher than 2023. CF said that imports to Brazil are expected to remain strong this year because of forecasted high corn plantings and continued nominal domestic nitrogen production. In India the producer said urea inventory is believed to be low following strong domestic demand for urea, lower-than-targeted domestic urea production and lower urea import volumes in 2024. The company noted that there has been the inability of import agencies to secure targeted volumes in the country’s two most recent urea import tenders and that another urea import tender may be necessary in Q1 of 2025. If that comes forth it will compete for volumes with demand in the northern hemisphere for spring applications. Additionally, CF thinks it is likely that India will tender earlier in its next fertilizer year than in recent years given the lower urea stock position. For Europe there is approximately 25% of ammonia capacity and 20% of the urea capacity is reported in shutdown/curtailment as of January. The producer said it believes that ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term given the region’s status as the global marginal producer. Looking at China, the company said the ongoing export controls continue to limit urea export availability from the country. There were less than 300,000 tonnes of urea in 2024 exported, which was 94% lower than 2023. CF has a view that urea exports may resume following China’s domestic spring application season. In Russia exports have increased by 16% through the end of Q3 2024 compared to the same period in 2023, with the producer attributing this to the start-up of new urea granulation capacity and producers favoring urea upgrades over UAN upgrades. Also, it cites the willingness of certain countries to purchase Russian fertilizer, including the US and Brazil. CF said over the medium-term the significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers. Longer-term the company expects the global nitrogen supply and demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global demand growth. That rate is projected to be approximately 1.5% per year for traditional applications and new demand growth for clean energy applications. Further the amount of global production is seen as remaining constrained by continued issues over the availability and cost of natural gas.

20-Feb-2025

LONDON (ICIS)–A new framework aimed at increasing the competitiveness of European industry is targeting lower energy costs and stronger purchase incentives for local and sustainable products, according to a leaked early draft of the measures. New legislation intended to reduce energy costs for industry Increased focus on purchasing local products No watering down of decarbonisation targets A draft text of the European Commission’s Clean Industrial Deal sets out plans to strengthen the markets for sustainable products and provide greater assistance for heavy industry to cope with energy costs, rather than easing decarbonisation targets. Details of the industrial deal are set to be released formally on 26 February ENERGY European industry has increasingly struggled to remain viable in the wake of surging energy costs on the back of the region’s shift away from Russian natural gas since 2022. The Commission has discussed various options to mitigate this in recent weeks, including an energy price cap. The draft deal text – which is incomplete and subject to change –  proposes that the European Investment Bank (EIB) backstop power purchase agreements for small and energy-intensive businesses. Modernising the bloc’s grid infrastructure is also a priority. The EIB would counter-guarantee part of the PPAs taken on by businesses for long-term renewable energy purchases, to lower the cost of investing and provide guarantees allowing green power projects to move forward. In a bid to push down energy prices in the short-term, the Commission is also pushing for member states to cut electricity taxes to the legal minimum thresholds for industrial players investing in decarbonisation. The Commission is currently scrutinising the functioning of Europe’s gas markets through a task force set up this month. EUROPE FOCUS "European preference criteria" are set to become a prominent factor in public and private procurement, according to the draft text, as well as new labelling for industrial products to more clearly delineate greener products from fossil-based ones. The new measures could set out “minimum local content” requirements along with more robust sustainability criteria for public procurement, as well as exploring options for embedding similar “non-cost criteria” into product legislation. CIRCULARITY, HYDROGENThe Commission could be set to limit the export of waste raw materials deemed critical for circular production, and is expected to ease restrictions on movement of raw materials across the region in the Circular Economy Act, expected next year. Policymakers are also looking to clarify rules on low-carbon hydrogen production, and are set to launch a third call for projects through the Hydrogen Bank, the auction house set up to incentivise projects and investment, in the third quarter 2025. CBAM REFORMS, DECARBONISATION TARGETSWith a targeted package for the chemicals sector, which the draft text refers to as the “industry of industries”, expected towards the end of the year, the Commissions’ review of the proposed carbon border adjustment mechanism (CBAM) continues. Intended to levy fees on the CO2 emissions of energy-intensive goods imports such as steel and fertilizers, the Commission is proposing to simplify the framework ahead of its roll-out next year, and reduce the administrative burden on businesses. A review of the planned measures will be released in the second half of 2025, which will also see potential for CBAM to be extended to other downstream products. Chemicals sector executives have largely opposed the prospect of CBAM being applied more widely to products from the sector. While the draft clean industrial deal text prioritises reducing the cost burden of the energy transition, no move has been made to water down the overall carbon reduction targets in place in the region. The target remains to become a decarbonised economy by 2050, and cut emissions by 90% by 2040. Focus article by Tom Brown. Thumbnail photo: At the European Council, Brussels (Source: Shutterstock)

19-Feb-2025

HOUSTON (ICIS)–Even with potential tariffs coming in two weeks and winter looking like it wants to linger, possibly through much of February in some states, the US fertilizer industry is quite positive over the near-term direction of domestic products, especially urea. Many participants gathered this week at the first major US fertilizer conference where the strong tone that has been developing to start the year was on full display. The current outlook comes from the lift in near term prices and firm sentiment towards there being good consumption of the volumes already positioned as field work begins in more areas over the rest of this month. There is also an upbeat view towards there being solid demand patterns throughout the season if inventory tightness does not impede that flow, with it widely expected that the current conditions and the arrival of the peak spring season will promote further value escalation in the short-term. Further boosting the overall optimism is this season’s corn plantings with estimates remaining elevated and now ranging between 93 million to 96 million acres potentially. The realization of the higher end of that projection is likely dependent on corn prices being supportive over the next several weeks and there being an early start of field work in key states. It was expressed that the current low inventory of products, especially in nitrogen could become a limiting factor with a source saying, “we don’t have enough urea for 95 million to 96 million acres”. That these extra sowings would cause a lift in total fertilizer consumption is not for certain. Some of the increased acreage could be on land considered marginal for growing high yielding corn and farmers could chose to do less than they would on prime land or chose a cheaper option. Or even count on enough nutrient carryover from the last crop. When it came to weighing the impacts that fertilizer and agricultural interests within both Canada and the US might face with tariffs there was significant discussions over whether these measures would be imposed or would they not come forth at all. If so, would it be implemented at the full rate of 25% or be placed at a different level higher or lower, with participants almost evenly split between their viewpoints. Those operating in Canada or with interest in product within the country are definitely more vested in these outcomes than others in the industry and their concerns were sharper. As one source said a large spike in values would be the most immediate hit to the markets and more than anything there is “a lot of uncertainty and it’s changed the way we are selling there”. Some participants are also seeing US retailers becoming more cautious about their further commitments even though supply is tight for nitrogen products. In many areas winter weather is keeping activities quite reduced and could keep the northern areas frozen a bit longer, there was still some optimism that some areas could get underway as March begins. If that materializes that would be deemed an early start in some locations, with there being the mindset that the sooner farmers start the more time for fertilizers to be consumed. For now, field work is only underway in the southern states in places that have been warmer and dry but that is only a small portion of what is ahead for spring applications. It was discussed that there are some wheat inputs that have begun, and it is expected that over the coming weeks even more efforts will start where there is good soil moisture for not only ammonia but also urea and UAN applications.

14-Feb-2025

LONDON (ICIS)–Here are some of the top stories from ICIS Europe for the week ended 7 February. BP puts Gelsenkirchen, Germany refinery, crackers up for sale BP plans to sell its to sell its Ruhr Oel refinery, crackers and downstream assets at Gelsenkirchen in Germany. Surge in natural gas prices highlights problem for chemical producers in Europe The challenges facing petrochemical producers in Europe are well documented, but higher natural gas prices this winter and an increase in liquefied natural gas (LNG) imports highlight just how tough these difficulties are – particularly in comparison with other regions. EU defiant on tariff threats but faltering growth could limit response The European Commission has pronounced itself ready to respond to any tariff measures introduced by the US, but the fragility of the region’s recovery leaves it ill-equipped to fight a trade war. Europe PMMA faces price squeeze from cheap imports, weak demand The polymethyl methacrylate (PMMA) market in Europe faces a price and margin squeeze amid ongoing weak demand and availability of cheap imports. Europe fertilizer sector considers impact of proposed EU tariffs on Russia The announcement by the EU on 28 January that it has adopted a proposal to impose tariffs on a number of agricultural products from Russia and Belarus, as well as on certain nitrogen-based fertilizers, has been welcomed by European fertilizer producers. Urea uptick surpasses expectations as demand continues to outpace supply Expectations of an import tender in India and increasing demand from the US ahead of the start of fertilizer application for the spring will continue to boost demand for urea in the first quarter.

10-Feb-2025