Urea and nitrates

BANGKOK (ICIS)–The US tariff policies and other economic headwinds present significant challenges for chemical exporters in the Gulf Cooperation Council (GCC) region. Nevertheless, opportunities and avenues for cooperation exist, especially with Asia, according to the secretary general of the Gulf Petrochemicals and Chemicals Association (GPCA). "Navigating the complexities of global trade is a top priority," Abdulwahab Al Sadoun told ICIS on the sidelines of the Asia Petrochemical Industry Conference (APIC) 2025. The GCC region comprises six Middle Eastern countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). The GPCA plays a pivotal role in facilitating partnerships between companies in both the GCC region and China, a strategy that has gained momentum in recent years, Al Sadoun said. "We estimate that GCC chemical producers hold equity in joint ventures processing approximately 2.7 million barrels/day of crude and operating over 23 million tonnes per year of downstream petrochemical capacity across China, South Korea, Malaysia and Singapore," said Al Sadoun. While US tariff policies present significant challenges for GCC chemical exporters, Al Sadoun sees opportunities amid the turbulence. “Even a baseline 10% tariff will raise the price of GCC chemical products in the US market,” Al Sadoun said, citing a paper published by GPCA that highlighted the potential effects of US President Donald Trump’s tariffs. Some products that would be particularly affected are high-volume, price-sensitive exports such as urea, paraxylene (PX) and polyethylene terephthalate (PET). However, Asia’s dominance as a trading partner offers a silver lining. “Asia accounted for over half of our total exports in 2023," Al Sadoun said, with China, India and Turkey among key markets. "If China reduces imports from the US, the GCC can step in to fill that gap, provided we act swiftly to capture market share and diversify our trade partners,” said Al Sadoun. Asia also accounts for well over half of global plastics consumption, with more than 50% of all GCC chemical exports already flowing to Asia, Al Sadoun added. “Recent joint ventures, such as Aramco’s partnerships at Panjin and Gulei in China, both designed around crude‑to‑chemicals schemes that convert more than 50% of each barrel directly into petrochemical feedstock, demonstrate how upstream strength can be paired with local finishing capacity,” Al Sadoun said. GCC CHEM PRODUCERS HAVE COMPETITIVE EDGEAmid falling oil prices in 2025, Al Sadoun believes chemical producers in the Gulf still hold an advantage over competitors reliant on naphtha. “While crude oil prices may be falling, the Arabian Gulf’s gas-based model still gives chemical producers a clear cost edge over their naphtha-reliant competitors.” At the same time, he emphasized the importance of continuing to optimize energy use and focus on higher-value projects. Companies are channeling investments into specialty elastomers, crude-to-chemicals complexes and downstream sectors such as mobility, packaging and electric vehicle (EV) materials, Al Sadoun said. “With plant utilization in the Arabian Gulf running in the 90% range – far above most global peers – the region is well placed to ride out softer oil, provided it keeps lowering variable costs and broadening its product slate. “GPCA’s role is to benchmark those cost and efficiency gains across its membership and ensure best practice spreads quickly from one site to the entire Gulf cluster.” SUPPLY CHAIN RESILIENCE A KEY FOCUSSupply chain resilience has emerged as a critical focus for Arabian Gulf chemical producers. “Recent shocks, such as geopolitical flare-ups, pandemic-era port closures, even weather-driven canal disruptions, have confirmed that leading companies cannot simply react; they must anticipate, adapt and seize the openings that turbulence creates,” Al Sadoun said. Al Sadoun pointed out four lessons: the first, route flexibility; the second, the need for end-to-end visibility; third, the need for regional buffer stocks such as joint warehouses in key import markets; and lastly, digital risk forecasting. The use of tools such as artificial intelligence (AI), blockchain and the Internet of Things (IoT) are moving supply chain management from reactive to predictive, while diversified sourcing and strategic inventories reduce single region dependency, Al Sadoun said. FOCUS ON RENEWABLES Even as the GCC region continues to leverage its cost advantage through gas, its member countries are also committed to energy transition. “GCC nations aim to source 25-50% of their energy mix from renewables by 2030,” Al Sadoun said, adding that the region is also investing heavily in carbon capture, utilization and storage (CCUS), currently capturing 4.4 million tonnes of CO2 annually – 10% of the global CCUS capacity. Hydrogen production is another priority, with Oman, the UAE and Saudi Arabia setting ambitious targets. Oman has committed to producing 1 million tonnes of hydrogen by 2030, the UAE to 1.4 million tonnes of hydrogen by 2031 and Saudi Arabia aims for 4 million tonnes of hydrogen by 2030. "These initiatives are part of our strategy to reduce environmental impact while maintaining our competitive edge," Al Sadoun emphasized. APIC 2025 runs in Bangkok, Thailand, from 15-16 May. Interview article by Jonathan Yee (recasts paragraphs 1 and 7 for clarity)

16-May-2025

LONDON (ICIS)–Fertiglobe has agreed to acquire Wengfu Australia’s distribution assets as part of a strategic expansion strategy, the urea and ammonia producer said on Monday. The acquisition will expand the Abu Dhabi-headquartered firm’s downstream reach and enhance access to Australian customers. It currently supplies around 600,000 tonnes/year of urea to the country. The purchase price of Wengfu will be based on net asset value plus a premium of around $8 million, with the final amount to be determined at closing. “Acquiring Wengfu’s assets marks a strategic step in our value-driven growth strategy and accelerates our commercial footprint in Australia, one of the world’s fastest-growing agricultural regions,” said Fertiglobe CEO Ahmed El-Hoshy. Fertiglobe said the transaction was expected to be 2.8% and 4.1% earnings per share (EPS) accretive before synergies in 2026 and 2027 respectively. Closing of the deal is subject to customary regulatory and legal approvals, it added in a statement.

12-May-2025

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. The producer highlighted in its earnings release that global pricing was supported in Q1 of 2025 by positive global demand, constrained availability due in part to natural gas shortages in Iran, and China’s continued restrictions on urea exports. CF said there is anticipated strong demand from not only global corn stocks-to-use ratio reaching its lowest level since 2013, but because there is below average global inventories and challenging production economics in Europe. Looking at North America, CF said there should be strong nitrogen demand during the spring application season due to favorable returns for corn compared to soybeans, which is driving higher planted corn acres in 2025. The producer noted that the US Department of Agriculture (USDA) reported in March that growers intend to plant 95.3 million acres of corn this season. For Brazil, the company expects the country will remain the largest urea import region, with imports projected to exceed 8 million tonnes, with this outlook supported by strong planted corn acreage and continued nominal domestic nitrogen production. In India, there is less urea inventory with CF saying that lower-than-targeted domestic production and higher year on year urea sales pushed urea inventory levels down by approximately 35% compared to March 2024. As a result, their management expects higher urea import requirements for the rest of this year to meet grower demand and replenish urea stocks. Across Europe the producer is projecting that ammonia operating rates and overall domestic nitrogen product output will remain below historical averages over the long-term given the region’s status as the global marginal producer. For China, CF said the ongoing urea export controls continue to limit availability from the country with minimal volumes concluded in Q1 of 2025. The company feels that urea exports will not resume until the conclusion of China’s domestic spring application season at the earliest. In Russia, urea exports are expected to increase 3% in 2025 due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase Russian fertilizer, including the US and Brazil. CF also is expecting that 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 would then remain supportive of strong margin opportunities for low-cost North American producers. In the longer-term view CF is projecting that the global nitrogen supply demand balance will further tighten as global capacity growth over the next four years is forecasted to not keep pace with the expected rise in global demand. Those needs are anticipated to have a growth rate of approximately 1.5% per year for traditional applications and see more new demand emerging for clean energy applications. CF has a view that global production will remain constrained by poor margins for European ammonia producers and availability of natural gas in Egypt, Iran and Trinidad.

08-May-2025

LONDON (ICIS)–Europe melamine editor Melissa Hurley interviews senior editor Sylvia Traganida, deputy managing editor Deepika Thapliyal, and market reporters Joy Foo and Connor Phillips. Market factors to consider ahead of May: Asia melamine market grappling with weak demand and increasing supply Asia exports dropped in March but expected to flow into Europe in May/June Reduced melamine supply in Europe offset by ongoing sluggish demand conditions No tariff impact on US melamine so far Global urea demand expected to slow from H2 May China not resuming urea exports yet despite the domestic season ending Subdued European ammonia demand; waiting for nitrates market to pick up Natural gas TTF prices soften, but European fertilizer producers reluctant to ramp up production due low demand To listen in a separate window, click here. Additional reporting from Sylvia Traganida, deputy managing editor Deepika Thapliyal, market reporters Joy Foo and Connor Phillips.

29-Apr-2025

MUMBAI (ICIS)–State-owned National Fertilizers Ltd (NFL) plans to acquire an 18% stake in a proposed joint venture (JV) that will build a 1.27 million tonne/year urea plant at Namrup in India’s eastern Assam state. NFL plans to invest Indian rupees (Rs) 5.72 billion ($67 million) in the Namrup IV Fertilizer Plant, the company said in a disclosure to the Bombay Stock Exchange (BSE) on 18 April. The state government of Assam will hold a 40% stake in the proposed joint venture; with NFL and Oil India Ltd (OIL) each holding an 18% stake. Hindustan Urvarak & Rasayan Ltd (HURL) will own 13% and Brahmaputra Valley Fertiliser Corp (BVFCL) will have the remaining 11%. The project, which will be set up within the complex operated by BVFCL, is expected to cost Rs106 billion, it added. The plant is expected to be commissioned within 48 months of the project launch, NFL said, adding that once operational, the plant will help meet the growing demand for urea in northeast India. The Indian government approved the proposal for the new project on 19 March 2025 as part of its effort to reduce urea imports. Indian finance minister Nirmala Sitharaman had announced the project during her budget speech on 1 February 2025. It will be the eighth plant with the same capacity that will be built in the south Asian country since 2019. ($1 = Rs85.12)

21-Apr-2025

SINGAPORE (ICIS)–Arab Gulf (AG) ammonia annual average export price is forecast to ease further this year (see Chart 1) as producers are expected to keep prices competitive to maintain market shares in Asia, particularly as weak Asian demand for industrial applications including acrylonitrile (ACN) and caprolactam (capro) have capped ammonia prices. AG ammonia producers are expected to maintain its export prices in 2025 at just below parity with southeast Asian producer with FOB AG at around 97% of FOB SE Asia prices (see Chart 2) to optimize returns while keeping market shares in their key India and Taiwan markets. AG ammonia producers’ netbacks in Taiwan and India in 2025 are projected to return to levels similar to 2020 before the Russian-Ukraine war with AG FOB at around 89% and 84% of CFR Taiwan and CFR India prices, respectively (see Chart 3) Asia remains an important market for AG producers particularly when their returns from Europe have been shrinking. AG ammonia producers’ FOB netbacks from Europe is expected to remain constrained in 2025 with the FOB AG annual price hovering at around 63% of the CFR NWE annual price, following two years of higher returns in 2022 and 2023. (see Chart 4) AG ammonia producers have not been exporting much to Europe except for 2022 and 2023 when outbreak of the Russia-Ukraine conflict and subsequent sanctions on Russian exports created a window of opportunity for AG producers. (See Chart 5) Europe ammonia import prices are expected to remain elevated as high natural gas prices had led several ammonia plants in the region to be permanently shut in 2022, with the ammonia prices remaining tied to the prices of key exporters Trinidad and Algeria. Egypt also exports ammonia to Europe, but its production has been susceptible to disruptions caused by natural gas shortages as seen in Q3 last year and February this year. Europe import prices are expected to ease if Russia resumes exports to Europe hence a burning question for importers is when Togliattiazot’s (TOAZ's) export terminal at Russia’s Taman Port would start loading ammonia. TOAZ is part of the Uralchem Group, and the terminal was expected to start loading ammonia in Q1 this year. Ammonia is a feedstock for inorganic fertilizers such as urea and ammonium sulphates and chemicals such as acrylonitrile (ACN). With contributions from Song Hea Beom, Sylvia Traganida

28-Mar-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

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