Potash

TORONTO (ICIS)–As US President Donald Trump keeps pursuing his erratic on-off tariff policies, Canada and other countries are coming under pressure to conclude bilateral deals with the US. However, in a webinar hosted by Canadian law firm Torys, Canada’s former chief trade negotiator, Steve Verheul, advised countries not to rush into deals. What price will the US extract for a deal? Will the US honor the deal? What will happen to multilateral trade? CANADA NEEDS US MARKET Canada is “kind of stuck by the key facts” that about two thirds of its GDP relies on trade, and 75% of its exports go to the US, Verheul said. While Canada can work to diversify its export markets and remove barriers to its inter-provincial trade to help offset some of the negative impacts from US tariffs, this will go only so far, he said. “At the end of the day we are not going to be able to get away from some kind of a relationship with the US”, he said. It was therefore in Canada’s interest to get started on negotiating a new deal with the US, Verheul said. However, Canada needed to be cautious as the US administration currently sees itself in a strong position and would therefore make “extreme” demands, he said. Verheul suggested that Canada and others wait until there is more “push-back” from stock market turmoil and economic indicators that could bring the US demands down to more reasonable levels. He noted signs of push-back from US corporate leaders, as well as some Republican lawmakers. Within the US administration, however, there did not seem much dissent to Trump’s hardline trade policies, he said. Another challenge for Canada was that any new trade deal with the US will also include security-related issues, which will make the negotiations broader and more complicated, Verheul said. Canada, of course, would aim to restore the free trade it enjoyed under the US-Mexico-Canada (USMCA) agreement, before Trump began imposing tariffs after starting his second term on 20 January, Verheul said, adding, “Anything less than that is going to be difficult to accept.” Importantly, going forward Canada needed to try to cooperate with Mexico, as well, he said. After Trump made his initial tariff threats, some prominent Canadian politicians criticized Mexico and called for its exclusion from USMCA. Verheul added that Canada could take some comfort from Trump’s tariff exemptions for USMCA compliant goods and products. That was an “important signal” and “gives us something to build on” as it was an acknowledgement that Trump sees North America of particular importance and that most of the region’s trade would continue to be duty-free – with the exception of the specific sectors the president views of strategic importance, Verheul said. These sectors include auto; steel and aluminium, lumber, pharmaceuticals and semiconductors. USMCA was concluded during Trump’s first term. At the time Trump, lauded it as, “a tremendous victory for American workers, farmers, manufacturers and businesses alike”. Verheul led the USMCA negotiations for Canada. WHAT PRICE? Verheul said that for Canada or others seeking a bilateral deal with the US, a key question was, “What price will the US extract for a deal?” This was difficult to determine at this time as “things are changing day to day” at the White House and, “a lot of the policy thinking in this Trump administration is not backed up by a lot of careful analysis”, Verheul said. In its tariff policy, the US was not just looking at a country’s tariffs, and how to counter those, he said. Instead, the Trump administration was seeking to use tariffs to target other countries’ value added taxes (VAT) and alleged currency manipulations, as well. Furthermore, Trump wants to raise revenue through tariffs, and at the same time he wants to use tariffs to incentivize the re-shoring of manufacturing capacities to the US, Verheul said. Given these US ambitions, Verheul advised countries not to move too quickly on concluding deals. “The countries that are most eager to conclude something with the US right now are going to face the most extreme US demands,” he said. WILL US HONOR NEW DEALS? The other question is whether the US will honor new bilateral deals, Verheul said. He noted that the US has broken its obligations under most of its trade agreements and added that “the US is currently breaching the core fundamentals” of USMCA. Despite the lack of assurances that the US will honor its end of new trade deals, Canada and other countries would still seek to obtain the “sense of added security” they may get from concluding these deals, he said. “Better to have some kind of agreement than to have no agreement, even if you don’t have a lot of confidence in your trading partner living up to the agreement at the end of the day,” he said. Verheul added that countries were also hoping that things may improve under a future US president. “So, there is a certain element of ‘let’s do what we can during this administration’ and see if we can get back on track with the next administration, whatever that might look like”, he said. FUTURE OF GLOBAL TRADE Another key issue in rushing into bilateral deals with the US now is what this could mean for the future of multilateral trade, which is based on the World Trade Organization (WTO) and the most favored nation (MFN) rule. A specific country may negotiate and reach a deal with the US, Verheul said. However, is that country then going to provide the concessions it made to the US to all other trading partners, he asked. If countries do not abide by the MFN rule, then the international trade system may unravel, with the US emerging as the hub and all other countries being the spokes, leaving the US in control of trade relations with all of those countries, he said. As it stands, countries needed to ask themselves whether the current trade tensions were specific to Trump and would just last through the next US midterm elections or the end of his term in four years, Verheul said. “Does everybody want to make a radical change to the entire world economy if it might turn around again, in two or four years?” he said. CURRENT STATUS OF US-CANADA TARIFF CONFLICT Canada’s finance ministry provided the following overview of the current status: On 4 March, US tariffs of 25% on Canadian goods and 10% on energy and potash exports from Canada to the US came into effect. The US subsequently limited these tariffs to non-USMCA compliant goods. On 12 March, the US imposed tariffs of 25% on Canadian steel and aluminium products. On 3 April, US tariffs of 25% on Canadian automobiles came into effect. Canada responded by imposing 25% tariffs on nearly C$60 billion (US$43 billion) of goods imported from the US, and on 9 April it imposed a 25% retaliatory tariff on US-made vehicles. Vehicle imports from the US were C$35.6 billion in 2024. The retaliatory tariffs on US vehicles are the first implemented by the government of Mark Carney. Carney, who took over as prime minister from Justin Trudeau on 14 March, has called an election for 28 April. Meanwhile, Trump on 9 April announced that his so-called reciprocal tariffs would be lowered to a universal 10% for most countries, for 90 days. This 10% tariff will not apply to imports from Canada, Canadian government officials confirmed. However, the earlier US tariffs on Canadian steel, aluminium and auto remain in place. In chemicals and plastics, US-Canada trade comes to about C$ 115 billion/year, according to the Chemistry Industry Association of Canada (CIAC). (US$1 = C$1.41) Please also visit US tariffs, policy – impact on chemicals and energy Thumbnail Photo: Steve Verheul (Source: Torys) Focus article by Stefan Baumgarten

10-Apr-2025

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

HOUSTON (ICIS)–US-listed shares of chemical companies fell sharply – many by more than 5% – on Monday as the US proceeds with plans to impose tariffs on Canada, Mexico and China, its three biggest trading partners. The selloff in chemical shares was sharper than that for the general market. The following table shows the stock indices followed by ICIS. Index 3-Mar Change % Dow Jones Industrial Average 43,191.24 -649.67 -1.48% S&P 500 5,849.72 -104.78 -1.76% Dow Jones US Chemicals Index 851.42 -17.99 -2.07% S&P 500 Chemicals Industry Index 901.32 -17.93 -1.95% Shares of every US-listed company followed by ICIS fell. TUESDAY'S TARIFFSUnless the nations reach last-minute deals, the US will impose 25% tariffs on all imports from Mexico, 10% tariffs on all energy imports from Canada and 25% tariffs on all other imports from Canada. The US will also proceed with an additional 10% that it proposed on all imports from China, according to a post from the White House’s Rapid Response account on social media platform X. This is on top of the 10% in new tariffs that the US already imposed earlier in 2025 on imports from China. EFFECT ON US MARKETSWhile the US has large trade surpluses in polyethylene (PE), it still imports large amounts of the plastic from Canada. Many of these imports go to processors in the bordering states of Illinois, Michigan and Ohio. These states are far from most of the plastic plants in the US, which are concentrated in Texas and Louisiana. Processors in these states that border Canada will need to pay the tariffs or pay higher shipping costs to secure material from suppliers farther away. The US also imports notable amounts of purified terephthalic acid (PTA) from Canada and Mexico as well as methylene diphenyl diisocyanate (MDI) from China. The US receives large Canadian shipments of ammonia and potassium chloride, which is also known as muriate of potash (MOP). At least one company, Canada's Chemtrade Logistics, said it expected to pass a larger part of the tariffs to its customers. Chemtrade Logistics exports sodium chlorate, chlorine and sulfuric acid to the US. RETALIATIONChina already has retaliated by imposing tariffs on US imports of coal, liquefied natural gas (LNG), crude oil, farm equipment and some vehicles. China has restricted exports of antimony and bismuth. Antimony is used to make catalysts for polyethylene terephthalate (PET), and bismuth is used to make catalysts for polyurethanes. Canada had proposed retaliatory tariffs of 25% on Canadian dollars (C$) 155 billion ($107 billion) worth of US imports. The tariffs would be imposed in two phases. The first phase would cover C$30 billion of US imports of beverages, cosmetic, paper products and some finished plastics products, among others. Canada was preparing a second list, worth C$125 billion. All three countries could impose retaliatory tariffs on the substantial exports of PE, polyvinyl chloride (PVC) and other ethylene derivatives from the US. OTHER POSSIBLE US TARIFFSThe US has threatened to impose tariffs of 25% on imports from the EU. On 12 March, the US will impose tariffs of 25% on all imports of steel and aluminium, a move that will remove exemptions that it granted to some countries. The US will expand the tariff to cover more products made of steel and aluminium. In early April, the US said it would introduce retaliatory tariffs on imports from the rest of the world. These tariffs will consider what the US considers non-tariff trade barriers, such as value added tax (VAT) systems. CHEM STOCK PERFORMANCEThe following table shows the performances of US-listed shares followed by ICIS. Symbol Name $ Current Price $ Change % Change ASIX AdvanSix 26.82 -1.10 -3.94% AVNT Avient 41.23 -1.54 -3.60% AXTA Axalta Coating Systems 35.1 -1.11 -3.07% BAK Braskem 3.52 -0.17 -4.61% CC Chemours 13.86 -1.09 -7.29% CE Celanese 47.02 -3.92 -7.70% DD DuPont 78.83 -2.53 -3.11% DOW Dow 36.06 -2.05 -5.38% EMN Eastman 94.46 -3.39 -3.46% FUL HB Fuller 55.73 -1.01 -1.78% HUN Huntsman 16.04 -0.89 -5.26% KRO Kronos Worldwide 8.43 -0.32 -3.66% LYB LyondellBasell 73.41 -3.42 -4.45% MEOH Methanex 41.47 -2.57 -5.84% NEU NewMarket 562.65 -7.46 -1.31% NGVT Ingevity 45.24 -2.42 -5.08% OLN Olin 23.87 -1.52 -5.99% PPG PPG 111.72 -1.50 -1.32% RPM RPM International 123.09 -0.80 -0.65% SCL Stepan 58 -3.375 -5.50% SHW Sherwin-Williams 356.73 -4.75 -1.31% TROX Tronox 7.02 -0.615 -8.06% TSE Trinseo 4.62 -0.30 -6.10% WLK Westlake 108.71 -3.59 -3.20% ($1 = C$1.45) Please also visit the US tariff, policy – impact on chemicals and energy topic page Thumbnail shows money. Image by ICIS.

04-Mar-2025

HOUSTON (ICIS)–The US will proceed with its proposed 25% tariffs on most goods from Canada and Mexico, and the nation will increase tariffs on imports from China by another 10%, all effective on 4 March, the president said on Thursday. In addition, the US will proceed with its proposed reciprocal tariffs on 2 April, President Donald Trump said on social media. The 4 March date still leaves time for the US to reach some agreement with Canada or Mexico to cancel or delay the proposed tariffs. The US agreed to a 30-day delay with Canada and Mexico on 3 February, the day before it had initially planned to impose the tariffs. On Wednesday, 26 February, Mexico's president said such an agreement was in the works. No agreement was reached with China, so the 10% tariffs went into effect. China retaliated by imposing tariffs on US imports of coal, liquefied natural gas (LNG), crude oil, farm equipment and some vehicles. RATIONAL FOR THE TARIFFSThe US will proceed with the tariffs, because Trump said illegal drugs that are made in China continue to enter the country from Canada and Mexico. "Drugs are still pouring into our Country from Mexico and Canada at very high and unacceptable levels. A large percentage of these Drugs, much of them in the form of Fentanyl, are made in, and supplied by, China," Trump said on social media. "We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled. China will likewise be charged an additional 10% Tariff on that date." THE PROPOSED TARIFFSUnder the proposal, the US will impose tariffs of 25% on all imports from Mexico. It would impose tariffs of 25% on all Canadian imports except energy. Energy imports from Canada would receive tariffs of 10%. Canada had already proposed retaliatory tariffs of 25% on Canadian dollar (C$) 155 billion ($108 billion) worth of US imports. The tariffs would be imposed in two phases. The first phase would cover C$30 billion of US imports of beverages, cosmetic, paper products and some finished plastics products, among others. Canada was preparing a second list, worth C$125 billion. EFFECT ON CHEMICALSCanada is a large source of imports of polyethylene (PE) to plastic processing hubs in the bordering states of Michigan, Illinois and Ohio. In addition, Canada exports PE to Texas. Canada also exports notable amounts of polypropylene (PP) and ammonia to the US. The nation accounts for nearly 90% of all US imports of potassium chloride, also known as muriate of potash (MOP). Mexico and Canada export meaningful amounts of purified terephthalic acid (PTA) to the US. China exports notable amounts of methylene diphenyl diisocyanate (MDI). Mexico and China are important sources of the main feedstock used to make fluorochemicals and fluoropolymers. OTHER TARIFFS PROPOSALS The US has threatened to impose tariffs of 25% on imports from the EU. On 12 March, the US will impose tariffs of 25% on all imports of steel and aluminium, a move that will remove exemptions that it granted to some countries. The US will expand the tariff to cover more products made of steel and aluminium. Please also visit the US tariff, policy – impact on chemicals and energy topic page ($1 = C$1.44) Thumbnail photo: Containers. (By XINHUA/Shutterstock)

27-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

Correction: In the ICIS story headlined “INSIGHT: US tariffs unleash higher costs to nation's chem industry” dated 3 February 2025, the wrong volumes were used for the following imports: Canadian ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94; Canadian polyethylene having a specific gravity of 0.94 or more, in primary forms; Canadian polyethylene having a specific gravity of less than 0.94, in primary forms; Canadian polypropylene, in primary forms; Canadian mixed xylene isomers; Mexican polypropylene, in primary forms; and Mexican cyclohexane. The US did not import cyclohexane from Mexico in 2023. A corrected story follows. HOUSTON (ICIS)–The tariffs that the US will impose on all imports from Canada, Mexico and China will unleash higher costs for the nation's chemical industry, create supply-chain snarls and open it to retaliation. For Canada, the US will impose 10% tariffs on imports of energy and 25% tariffs on all other imports. For Mexico, the US imposed 25% tariffs on all imports but the countries' presidents said on Monday the tariffs are being paused for a month. For China, the US will impose 10% tariffs on all imports. US IMPORTS LARGE AMOUNTS OF PE FROM CANADAUS petrochemical production is concentrated along its Gulf Coast, which is far from many of its manufacturing hubs in the northeastern and midwestern parts of the country. As a result, individual states import large amounts of polyethylene (PE) from Canada – even though the nation as a whole has a large surplus of the material. Even Texas imports large amounts of PE from Canada – despite its abundance of plants that produce the polymer. In addition, polyester plants in North and South Carolina import large amounts of the feedstocks monoethylene glycol (MEG) and purified terephthalic acid (PTA) from Canada. The US as a whole imports significant amounts of polypropylene (PP) and polyvinyl chloride (PVC) from Canada – again, despite its surplus of these plastics. The following table lists some of the main plastics and chemicals that the US imported from Canada in 2023. The products are organized by their harmonized tariff schedule (HTS) code. HTS PRODUCT MEASUREMENT VOLUMES 3901.40.00 Ethylene-alpha-olefin copolymers, having a specific gravity of less than 0.94 kilograms 1,319,817,405 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 1,088,071,523 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 420,561,390 2917.36.00 Terephthalic acid and its salts kilograms 407,710,439 2905.31.00 Ethylene Glycol kilograms 329,542,378 3902.10.00 Polypropylene, in primary forms kilograms 271,201,880 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 188,800,413 2902.44.00 Mixed xylene isomers liters 746,072 2905.12.00 Propan-1-ol (Propyl alcohol) and Propan-2-ol (isopropyl alcohol) kilograms 87,805,095 3901.30.60 Ethylene-vinyl acetate copolymers kilograms 71,372,396 Source: US International Trade Commission (ITC) IMPORTS FROM MEXICOMexico is not as large of a source of US petrochemical imports as Canada, but shipments from the country are still noteworthy. The following table lists some of the main plastics and chemicals that the US imported from Mexico in 2023. HTS PRODUCT MEASUREMENT VOLUMES 2917.36.00 Terephthalic acid and its salts kilograms 69,230,708 3901.10.50 Polyethylene having a specific gravity of less than 0.94, in primary forms kilograms 34,674,435 2915.24.00 Acetic anhydride kilograms 25,294,318 3904.10.00 Polyvinyl chloride, not mixed with any other substances, in primary forms kilograms 24,005,371 2915.31.00 Ethyl acetate kilograms 18,855,544 3901.20.50 Polyethylene having a specific gravity of 0.94 or more, in primary forms kilograms 14,469,582 3902.10.00 Polypropylene, in primary forms kilograms 8,849,478 Source: US International Trade Commission (ITC) IMPORTS FROM CHINAChina remains a significant source for a couple of noteworthy chemicals despite the effects of the tariffs that US President Donald Trump imposed during his first term in office. The following table shows 2023 US imports from China. HTS PRODUCT MEASUREMENT VOLUMES 29152100 Acetic acid kilograms 21,095,566 39093100 Poly(methylene phenyl isocyanate) (crude MDI, polymeric MDI) kilograms 206,642,886 Source: US International Trade Commission (ITC) China's shipments of plastics goods are more significant. OIL TARIFFS WILL HIT US REFINERSCanada and Mexico are the largest sources of imported crude oil in the US, and the heavier grades from these countries complement the lighter grades that the US produces in abundance. Those imports help fill out refining units that process heavier crude fractions, such as hydrocrackers, cokers, base oil units and fluid catalytic cracking (FCC) units. Refiners cannot swap out heavier Canadian and Mexican grades with lighter US grades. Instead, they will need to pay the tariffs or find another supplier of heavier grades, possibly at a higher cost. The following table shows the largest sources of imported crude in 2023. Figures are listed in thousands of barrels/day. COUNTRY IMPORTS % Canada 3,885 59.9 Mexico 733 11.3 Saudi Arabia 349 5.4 Iraq 213 3.3 Colombia 202 3.1 Total US imports 6,489 Source: Energy Information Administration (EIA) US refiners could take another hit from higher catalyst costs. These are made from rare earth elements, and China remains a key source. TARIFFS TO RAISE COSTS FOR FERTILIZERCanada is the world's largest producer of potash, and it exports massive amounts to the US. It is unclear how the US could find another source. Russia and Belarus are the world's second and third largest potash producers. Together, the three accounted for 65.9% of global potash production in 2023, according to the Canadian government. Canada accounts for significant shares of other US imports of fertilizers. The following table lists some of Canada's fertilizer shipments to the US in 2023 and shows its share of total US imports. Figures are from 2023. HTS PRODUCT MEASUREMENT VOLUME % 31042000 Potassium chloride metric tonne 11850925 88.8 31023000 Ammonium nitrate, whether or not in aqueous solution metric tonne 295438 76.6 31024000 Mixtures of ammonium nitrate with calcium carbonate or other inorganic nonfertilizing substances metric tonne 29203 75.7 31055100 Mineral or chemical fertilizers, containing nitrates and phosphates metric tonne 1580 66.1 31022100 Ammonium sulfate metric tonne 947140 49.6 31052000 Mineral or chemical fertilizers, containing the three fertilizing elements nitrogen, phosphorus and potassium metric tonne 147850 41.4 Source: US ITC SUPPLY CHAIN SNARLSIf US companies choose to avoid the tariffs and seek other suppliers, they could be exposed to delays and supply chain constraints. Other companies outside of the petrochemical, plastic and fertilizer industries will also be seeking new suppliers. The scale of these disruptions could be significant because Canada, Mexico and China are the largest trading partners in the US. The following table lists the top 10 US trading partners in 2023 based on combined imports and exports. Country Total Exports ($) General Imports ($) TOTAL Mexico 322,742,472,406 475,215,965,697 797,958,438,103 Canada 354,355,997,349 418,618,659,183 772,974,656,532 China 147,777,767,493 426,885,009,750 574,662,777,243 Germany 76,697,761,127 159,272,068,221 235,969,829,348 Japan 75,683,130,214 147,238,042,342 222,921,172,556 South Korea 65,056,093,590 116,154,470,335 181,210,563,925 UK 74,315,228,810 64,217,031,774 138,532,260,584 Taiwan 39,956,725,574 87,767,403,487 127,724,129,061 Vietnam 9,842,922,146 114,426,076,081 124,268,998,227 Source: US ITC RETALIATIONUS petrochemical exports would be tempting targets for retaliation because of their magnitude and the global capacity glut. China, in particular, could impose tariffs on US chemical imports and offset the disruptions by increasing rates at under-utilized plants. So far, none announced plans to target chemicals on Sunday. Canada's plans to impose 25% tariffs on $30 billion in US goods does not include oil, refined products, chemicals or plastics. That batch of tariffs will take place on February 4. Canada will impose 25% tariffs on an additional $125 billion worth of US goods following a 21-day comment period, it said. The government did not highlight plastics or chemicals in this second batch of tariffs. Instead, it said the tariffs will cover passenger vehicles and trucks, including electric vehicles, steel and aluminium products, certain fruits and vegetables, aerospace products, beef, pork, dairy, trucks and buses, recreational vehicles and recreational boats. In a statement issued on Sunday, Mexico's president made no mention of retaliatory tariffs. Instead, she said she will provide more details about Mexico's response on Monday. China said it will start legal proceedings through the World Trade Organization (WTO) and take corresponding countermeasures. RATIONALE BEHIND THE TARIFFSThe US imposed the tariffs under the nation's International Emergency Economic Powers Act (IEEPA), which gives the president authority to take actions to address a severe national security threat. In a fact sheet, Trump cited illegal immigration and illicit drugs. Saturday's executive order is the first time that a US president imposed tariffs under IEEPA. Prior IEEPA actions lasted an average of nine years. They can be terminated by a vote in Congress. Insight article by Al Greenwood (Thumbnail shows containers, in which goods are commonly shipped. Image by Shutterstock)

03-Feb-2025

HOUSTON (ICIS)–In an update on its Muga potash project financing, Highfield Resources announced it has submitted a formal request to its lenders to amend some terms and seek waivers within the binding agreement with Yankuang Energy Group and commence construction. The Spanish fertilizer firm said construction at Muga is expected to start in the first half of 2025 and that their said requests focus on extension of key project milestones which were agreed with the banks back in December 2022. It also seeks adjustments to the timelines for the project completion, repayment schedules and other associated dates to align with the updated construction and financing timelines. Highfield further stated that since it is expected that the syndicate composition will need to be amended, the company is already working with its financial advisor DBS Securities towards correcting it to better align it with the agreement. It added that it is confident this will result in an agreement that is better fit for the business development and strategy of the company and effectively support the successful completion of the Muga project. Located in northern Spain, Highfield has touted the Muga project as being able to deliver a new global and secure source in the middle of the European market.

30-Jan-2025

LONDON (ICIS)–The European Commission 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. In the proposal, the first round of tariffs will come into place on 1 July 2025. For fertilizers, on top of the existing duty of 6.5%, the tariff would be subject to an additional specific duty that would gradually increase, starting at €40/tonne or €45/tonne, depending on the type of fertilizer (corresponding to around 13% in ad valorem equivalent). The duty would increase to a prohibitive level of €315/tonne or €430/tonne respectively, three years after the start of the proposed regulation’s application (a level of about 100% in ad valorem equivalent). In the three-year transitional period, the prohibitive tariffs would also be introduced if imports from Russia and Belarus are above certain specified volumes. The increase in tariffs will not affect the transit of goods to countries outside the EU. The agricultural products affected by the new tariffs constitute 15% of agricultural imports from Russia in 2023 that had not yet been subject to increased tariffs. Once adopted by the European Parliament and the Council, all agricultural imports from Russia would be the subject of EU tariffs. The EU said the tariffs will support the growth of domestic production and the EU's fertilizer sector, which has suffered during the energy crisis. They will also ensure a steady fertilizer supply and, most importantly, for fertilizers to remain affordable for farmers. The proposal includes mitigating measures, should EU farmers see a substantial increase in fertilizer prices. In the press release, the EU expected the tariffs to negatively impact Russian export revenues, thus impacting Russia's ability to wage its war of aggression against Ukraine. Major fertilizer producers in Europe have been lobbying the EU to take immediate action against Russian fertilizer imports. The producers have called on the European Commission to act against the high volume of imports from Russia, in what is described as "unfair trade' due to the impact of Russian and Belarusian imports. They have expressed their frustration that the threat of Russian imports was not being taken seriously and not enough was being done to protect them ahead of the spring campaign which is now underway. A week ago, German fertilizer company SKW Piesteritz said it had been forced to shut one of its two ammonia plants for an indefinite period because of cheap fertilizers from Russia, coupled with high costs in Germany and an unfavorable political climate. Top Five European urea importers 2023 Importing country  Imports 2023 (tonnes)  Russian imports (%) France Customs                         1,671,913 15 Poland Customs                         1,160,717 30 Spain Customs                            997,551 10 United Kingdom HMRC                            977,229 13 Germany Customs                            921,321 37 Calls for a 30% tariff on Russian and Belarusian imports on all fertilizers no later than February was described by one supplier to Europe as “a bold move ahead of the season”. The new season for buying and application is underway in some parts of Europe. In areas where temperatures are higher than normal, urea will be applied in the next 7-10 days. Aside from the impact of cheap Russian fertilizer on the EU, participants are also worried about Europe’s growing reliance on Russia imports, the potential threat to EU food supply and a derailing of the region's plan to decarbonize. It is widely discussed that Russia will push European fertilizer producers out of the market, and replace gas with fertilizer imports. Urea is produced from ammonia and carbon dioxide. It has a 46% nitrogen content, which is the highest nitrogen content of any solid nitrogen fertilizer.  Urea can be applied by itself to the soil or mixed with phosphate and potash. Thumbnail photo source: Shutterstock

29-Jan-2025