Urea and nitrates

HOUSTON (ICIS)–Industrial gas firm Messer announced it has entered into a long-term renewal of a carbon dioxide (CO2) purchase and sale agreement with US fertilizer producer LSB Industries. As part of the agreement, Messer said it will subsequently commit more than $9 million into the liquid CO2 plant at LSB’s Cherokee, Alabama, facility with a focus of this investment on the continued safe and reliable operations at the site. The plant manufactures fertilizers including ammonia, urea and urea ammonium nitrate (UAN) and it also makes industrial and mining offerings including ammonium nitrate (AN) solutions and diesel exhaust fluid (DEF). Messer said this deal will help increase security of its CO2 supply and provide continuity to customers for decades to come. “The efficiency upgrades for the plant modernization effort will add more molecules to our network and reduce CO2 emissions at the site in-line with our sustainability goals,” said Chris Ebeling, Messer executive vice president, sales & marketing, North America.

09-Sep-2024

HOUSTON (ICIS)–The US Department of Agriculture (USDA) announced it is partnering with business owners to expand innovative fertilizer production, create more rural jobs and strengthen local economies by awarding $35 million through the Fertilizer Production Expansion Program (FPEP). Appearing at the annual Farm Progress Show in Boone, Iowa, USDA Secretary Tom Vilsack revealed the agency is granting funds for seven projects in seven states through the FPEP, which is funded by the Commodity Credit Corporation. This program provides grants to independent business owners to help them undertake such efforts as modernize equipment, adopt new technologies and build production plants. “The investments announced today will increase domestic fertilizer production and strengthen our supply chain, while creating good-paying jobs to benefit all Americans,” said Vilsack. USDA has invested $286.6 million in 64 projects across 32 states through FPEP. These projects have created 768 new jobs and will help increase domestic fertilizer production by over 5.6 million short tons. The FPEP was created with a commitment of up to $900 million in funding to address issues facing farmers due to rising fertilizer prices due to a variety of factors including the Ukraine conflict and a lack of industry competition. Citing examples of the investments, the agency highlighted that in Virginia ammonium sulfate producer AdvanSix will expand a facility utilizing an almost $12 million grant. The company currently provides 31,400 agricultural producers with ammonium sulfate on the East Coast and in the Midwest. Through this project, AdvanSix will expand their operational capacity by 195,000 short tons/year and increase their total output to more than 36,000 agricultural producers.

28-Aug-2024

HOUSTON (ICIS)–Nutrien said global potash demand during H1 2024 has been supported by favorable consumption and low channel inventories in North America and southeast Asia, with global nitrogen being boosted by steady demand and continued supply challenges in key producing regions. In its Q2 earnings release the Canadian fertilizer major said it is also seeing that there are expectations which have been created for record US corn and soybean yields, that have pressured crop prices. For the potash segment Nutrien said the settlement of contracts with China and India in July is expected to support demand in standard grade markets in the second half of this year. The producer said that the uptake on the summer fill program it offered in North America has been strong, and as such it has raised full-year global potash shipment forecast from 69 million tonnes to 72 million tonnes. It further said it expects a relatively balanced market in H2 2024. The company showed that potash sales volume guidance has been increased from 13.2 million tonnes to 13.8 million tonnes due to expectations for higher global demand in 2024. It noted that the range does reflects the potential for Canadian rail strike in the second half which would have a relatively short duration. Looking at the situation with global nitrogen, Nutrien said Chinese urea export restrictions have been extended into the second half and natural gas-related supply reductions could continue to impact nitrogen operating rates in Egypt and Trinidad. The company said US nitrogen inventories were estimated to be below average levels entering H2 2024, contributing to strong engagement the summer fill programs. Nitrogen sales volume guidance has been narrowed from 10.7 million tonnes to 11.1 million tonnes as Nutrien continues to expect higher operating rates at their North American and Trinidad plants, It is also counting on a growth in sales of upgraded products such as urea and nitrogen solutions. While end user demand has taken its typical summer slump, Nutrien said they expect buying for crop inputs in North America to remain strong in Q3 as growers aim to maintain optimal plant health and yield potential. With that view it noted that good affordability for potash and nitrogen will be supportive of the upcoming fall application rates “Crop input demand remains strong, and we raised our full-year outlook for global potash demand due to healthy engagement in all key markets,” said Ken Seitz, Nutrien president and CEO. “Our upstream production assets and downstream retail businesses in North America and Australia have performed well in 2024.”

08-Aug-2024

HOUSTON (ICIS)–CF Industries said in its latest nitrogen fertilizer market outlook that in the near-term it expects the global supply-demand balance to remain constructive, led by nitrogen import requirements through year-end for Brazil and India. The producer also anticipates there will be continued wide energy spreads between North America and high-cost production in Europe. The fertilizer producer said from the end of the second quarter of 2024 into the third quarter of this year this segment of fertilizers has faced challenges which include gas curtailments in Egypt and Trinidad, along with scheduled outages and a lack of substantial urea export availability from China. These factors the producer said have actually been beneficial for supporting global nitrogen pricing during a period of year that typically sees lower prices and low global shipments as demand shifts from the northern hemisphere to the southern hemisphere. “Over the medium-term, significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the Company believes the global nitrogen cost curve will remain supportive of strong margin opportunities for low-cost North American producers,” said CF Industries. “Longer-term, management expects the global nitrogen supply-demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global nitrogen demand growth of approximately 1.5% per year for traditional applications and new demand growth for clean energy applications.” It further said that global production is expected to remain constrained by the ongoing challenges related to cost and availability of natural gas. Looking specifically at North America the producer said it believes nitrogen channel inventories in the region for all products are below average based on strong demand for urea and UAN during the spring application season and higher-than-expected planted corn acres. CF added that reported UAN and ammonia fill programs achieved prices above 2023 levels despite softening farm economics in the region as corn and soybean prices have fallen due to higher forecasted production in 2024 in the US and Brazil. For Brazil urea consumption is forecasted to increase 3% year over year to more than 8 million tonnes, supported by improved supply availability and lower global urea prices. Urea imports to Brazil in 2024 are expected to be in the range of 7 million to 8 million tonnes as domestic production remains limited. Regarding India CF said the country is expected to be active importing urea through the second half as the country secured lower-than-expected volumes in its two most recent tenders. In addition, urea consumption is expected to rise to support rice, wheat and other crop sowings. Currently CF expects urea imports to India in 2024, including volumes supplied on a contractual basis, to be in a range of 5 million to 6 million tonnes as there are recently revitalized plants and new facilities operating at higher rates. For Europe, the producer said there was approximately 25% of ammonia and 30% of urea capacity reported in shutdown or curtailment mode in early July. CF said because of this situation it anticipates ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term, especially given the region’s status as the global marginal producer. As a result, the company does expect imports of ammonia and upgraded products to the region to be higher than historical averages. Looking at China, CF said the ongoing urea export policy continues to cause limited urea export availability from the country. For the first six months of 2024, China exported 140,000 tonnes of urea, which is 86% lower year-on-year. For Russia, the producer said their view is that urea exports will increase this year due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase those volumes, including the US and Brazil, Russian ammonia exports are projected to rise with the completion of the country’s Taman ammonia terminal in the second half, though annual ammonia export volumes are projected to remain below pre-war levels.

07-Aug-2024

HOUSTON (ICIS)–OCI said after facing difficult fertilizer market conditions in 2023 it is having a much better performance through Q2 of this year. The producer said they continue to see progress in efficiency gains as it remains focused on its global decarbonization strategy. In addition, over the past quarter OCI said it has taken significant steps towards advancing its strategic aims, which include accelerating expansion plans fueled by green methanol adoption and further diversification their European nitrates portfolio. “Following extremely challenging market conditions in 2023, conflated with prolonged turnarounds at some of OCI’s assets, OCI benefited in the second quarter of 2024 from sustained improved asset reliability across the business,” said Ahmed El-Hoshy, OCI Global CEO. “OCI’s manufacturing excellence program and investments to improve reliability continue to drive productivity gains, with asset utilization rates surpassing historical levels across both the nitrogen and methanol complex.” The producer said OCI Beaumont achieved a 96% rate through Q2, while OCI Nitrogen saw both ammonia lines running at approximately 90% level during the quarter. “The OCI team continues to do an outstanding job driving forward our operational excellence program, focused on reliability and process safety fundamentals,” El-Hoshy said. The producer also said their Texas Blue Clean Ammonia facility in Beaumont is on track to commence production in 2025.

02-Aug-2024

LONDON (ICIS)–AdvanSix’s second-quarter net income increased by $6.2 million year on year, with sales rising by 6% over the same period, the US-based producer said on Friday. (in thousands US$) Q2 2024 Q2 2023 Sales 453,479 427,940 Net income 38,927 32,728 Adjusted EBITDA 78,141 65,785 KEY POINTS- Adjusted EBITDA rose to $78.1 million, a $12.4 million increase, driven by stronger sales and firm acetone pricing. – Operating cash flow surged 43% to $50.2 million due to higher net income and favorable changes in working capital. – The performance, by an improved portfolio mix, reflected a 24% increase in earnings per share at $1.55. AdvanSix achieved targeted utilization rates across its value chain, delivering strong earnings and cash flow while increasing capital expenditures by $14.2 million to $33.5 million for maintenance and enterprise programs. OUTLOOK Higher ammonium sulphate (AS) pricing expected in Q3 2024, though typical seasonal declines are anticipated in the US and Canada. Modest improvement in North American nylon industry spreads expected through 2024. Capital expenditures for 2024 are expected to be $140 million-$150 million, focusing on risk mitigation and growth projects. Pre-tax income impact of planned plant turnarounds is expected to be $38 million-$43 million in 2024.

02-Aug-2024

HOUSTON (ICIS)–Although net income and sales fell year on year, US fertilizer producer CVR said it had a solid result for Q2 2024, which was driven in part by a combined ammonia production rate of 102%. The producer of ammonia and urea ammonium nitrate (UAN) announced during the period it had a net income of $26 million and net sales of $133 million for Q2 compared to net income of $60 million and net sales of $183 million for the second quarter of 2023. CVR said its facilities remained consistent compared to this quarter in 2023 as they produced 221,000 short tons of ammonia, of which 69,000 net tons were available for sale. The remaining balance was upgraded to other products, including 337,000 short tons of urea ammonia nitrate (UAN). In Q2 2023, those levels were at 219,000 tons of ammonia, with 70,000 net tons available to sale with the remainder upgraded, including 339,000 short tons of UAN. The average realized gate prices for UAN has also decreased with it down by 15% to $268/short ton, while ammonia dropped 26% to $520/short ton year-on-year. During this period in 2023 the average realized gate prices for UAN and ammonia were at $316/short ton and $707/short ton respectively. “CVR Partners reported solid operating results for the second quarter of 2024 driven by safe, reliable operations and a combined ammonia production rate of 102%,” said Mark Pytosh, CVR Partners CEO. “The spring planting season experienced some weather interruptions, however, planted acreage was higher than expected and demand for nitrogen fertilizer was strong.” Pytosh added that they expect to see good demand for nitrogen fertilizer remaining throughout 2024 even with prices being higher than experienced in 2023. “Our focus for the remainder of the year will continue to be on safe, reliable operations and maximizing our free cash flow generation,” Pytosh said.

30-Jul-2024

HOUSTON (ICIS)– Producer Agrimin Limited said their Mackay Potash project in Western Australia is now advancing towards a final investment decision. In an update on quarterly activities the company said it continues to focus on their project which is planned to be able to manufacture standard and granular sulphate of potash (SOP) products. Current activities include efforts towards project funding and strategic partnerships, design works, environmental approvals as well as product marketing. The Mackay project is set to undertake sustainable extraction of brine from Lake Mackay using a network of shallow trenches, which will be transferred along trenches into a series of solar evaporation ponds. Raw potash salts will crystallize on the floor of the ponds and be collected by wet harvesters and pumped as a slurry to the processing plant that will refine harvested salts into high quality finished SOP ready for direct use by customers. SOP volumes will be hauled by a dedicated fleet of road trains to a purpose-built storage facility at Wyndham Port. At the port it will be loaded via an integrated barge loading facility for shipment to customers. The project’s definitive feasibility study (DFS) was completed in July 2020 and demonstrated that once in operation it could be the world’s lowest cost source of seaborne SOP. The independent technical review of the DFS was completed in April 2021. The company has signed three binding offtake agreements with Sinochem Fertilizer Macao Limited for the supply of 150,000 tonnes/year, Nitron Group for 115,000 tonnes/year and with MacroSource for 50,000 tonnes/year. Agrimin has already completed site-based testing for the salt harvesters, geotechnical sampling and for the sealed haul road. Additionally, the company has worked with its proposed power contractor to refine the project’s site power station design which has resulted in a hybrid diesel, solar, wind and battery solution. Regarding environmental clearance the company said the project is being assessed by the Western Australian Environmental Protection Authority (EPA) and during the quarter it resubmitted the environmental impact assessment response, which included revised management and monitoring plans. It is still expected that the EPA approval will come during the second half of 2024. Agrimin said it is also progressing other secondary approvals, licenses and agreements which included coverage for mining operations project safety and water regulations.

26-Jul-2024

HOUSTON (ICIS)–US fertilizer producer CF Industries announced that it is moving forward with a carbon capture and sequestration (CCS) project at its Yazoo City, Mississippi complex that is expected to reduce carbon dioxide (CO2) emitted to the atmosphere from the facility by up to 500,000 tonnes annually. As part of the project the company has signed a definitive commercial agreement with ExxonMobil for the transport and sequestration in permanent geologic storage of the CO2 with sequestration expected to start in 2028. The producer is going to spend approximately $100 million at Yazoo City to build a CO2 dehydration and compression unit to enable CO2 to be generated as a byproduct of ammonia production and subsequently be captured to be transported and stored. Once sequestration by ExxonMobil has commenced, CF said expects the project to qualify for tax credits which provides a credit per metric ton of CO2 sequestered. “We are pleased to advance another significant decarbonization project that will keep CF Industries at the forefront of low-carbon ammonia production while also helping us achieve our 2030 emissions intensity reduction goal,” said Tony Will, CF Industries Holdings president and CEO. “This decarbonization project also will increase the availability of nitrogen products with a lower-carbon intensity for customers focused on reducing the carbon footprint of their businesses.” The producer added that once sequestration starts, the Yazoo City complex will be able to manufacture products with a substantially lower carbon intensity than conventional ammonia production sites. Most of the ammonia produced at the Yazoo City Complex is upgraded into nitrogen fertilizers such as urea ammonium nitrate solution (UAN) and ammonium nitrate (AN) or upgraded into diesel exhaust fluid. AN produced at Yazoo City is used as fertilizer and by the mining industry as a component of explosives. CF said demand for these products with lower carbon intensity is expected to increase significantly as agriculture and mining industries work to lower emissions in their supply chains.

25-Jul-2024

EGPC seeks another five LNG cargoes Local industry restarts, power cuts suspended Egypt to bring in up to 26 cargoes over summer LONDON (ICIS)–Egypt is in the market for another five LNG cargoes as the country continues to address declining domestic gas production and soaring summer demand. Egyptian General Petroleum Corporation (EGPC) has issued a TTF-linked DES tender covering 13-14 and 25-26 August and 3-4, 12-13 and 21-22 September delivery windows, traders said on Wednesday. The two cargoes for delivery in August and the middle cargo in September would be delivered to Egypt’s Ain Sukhna terminal, while the first and third September cargoes would be sent to Jordan’s Aqaba terminal for further pipeline delivery. The tender closes on 29 July at 12:00 noon Cairo time and is valid to 18:00 on the same day. This is the fourth LNG tender round Egypt has issued covering the summer period this year, as the country has been forced to turn from LNG exports to imports. EGPC has previously been in the market seeking a total of 22 cargoes in three separate rounds. All cargoes were reported to have been awarded, expect for the 1-2 September cargo in a two-cargo tender that closed on 22 July, one trader said. If the latest tender is fully awarded, this could bring a total of 26 spot cargoes into Egypt from mid-June to mid-September. UREA PRODUCERS RESTART Latest data from association JODI shows a continued decline in domestic gas production. Average May production was around 138 million cubic meters (mcm)/day, down from 142mcm/day in April and 163mcm/day in May 2023. However, the flow of LNG seems to have brought some relief to local industry. Some Egyptian urea producers shut down for a day last week but then restarted, sources said, with one source attributing the ramp up to LNG imports. Five cargoes have been delivered since the start of July, according to ICIS data. As of this week, urea plants in Egypt are running at around 80% capacity on average. “I believe this will [be sustained] till the end of summer period,” a urea source said. “Heard also that old electricity stations have started to work with fuel oil as an alternative [for] gas,” they added. Only one of Abu Qir’s prilled urea lines is down, while its other two lines are running as normal. The government has also suspended its electricity load-shedding program from 21 July until mid-September, as recently announced by Prime Minister Mostafa Madbouly. The Prime Minister said the power cuts halted after the arrival of some LNG cargoes. The cuts were introduced last summer and resulted in daily two-to-three hour power cuts across most of the country. Additional reporting by Deepika Thapliyal.

24-Jul-2024