Nitrogen Quarterly Press Release

Rising Global Nitrogen Capacity and the Impact on Pricing Fundamentals

Analysis of over 400 producers identifies that the drop in Chinese urea exports is off-set by the increase in global nitrogen capacity.

Keene, NH — September 8, 2016 – Recent analysis of several hundred nitrogen fertilizer production facilities spanning the globe indicates that the industry is headed for overcapacity.  As soon as 2019, fertilizer producers will find little pricing strength as global utilization dives to ~73% as new facilities come online.

Neil Fleishman, CFA, Director of industry research firm Green Markets stated “There is high confidence in a long run bearish view on nitrogen prices as supply is continuing to rapidly outpace demand. The next year will be a tipping point in that multiple expansions in Russia, Brazil, Argentina, Egypt, Saudi Arabia, Bangladesh, India, Indonesia and Vietnam will contribute to a global glut.”  Fleishman is closely tracking the trend, and while the global picture is one of oversupply, he reports significant variability at the country and regional level.

The North American nitrogen fertilizer market (which includes production of primarily Ammonia, Urea, Ammonium Nitrate, and UAN) is capitalizing on cheap gas and expanding capacity by magnitudes that once seemed implausible. As such, Fleishman indicates that “…the next several years will see the North American fertilizer market turn as domestic production replaces imports and export availability disrupts global dynamics. Lower global utilization levels will keep a lid on price.”

The Global Nitrogen Supply & Demand Model from Green Markets updates fertilizer market-balance data on a quarterly basis for this key nutrient category.  The model tracks individual factory output, at the country level, for the following number of producers:

China:
Coverage: 190 nitrogen producers

Examples:  Sinopec, China Blue Chemical (CNOOC), Petro China (CNPC), Yuntianhua

Other Asia-Australia:
Coverage: 107 nitrogen producers

Examples: Indian Farmers Fertilizer Cooperative (IFFCO), National Fertilizers (NFL), Rashtriya Chemical, Chambal Fertilizers, PT Pupuk Kalimantan Timur (Pupuk Kaltim), PT Pupuk Sriwidjaja Palembang (Pusri), Engro, Fauji Fertilizer, Qatar Fertilizer Company (QAFCO), Saudi Arabian Fertilizer Company (SAFCO), Ruwais Fertilizer (Fertil)

Europe:
Coverage: 57 nitrogen producers

Examples: Yara, Eurochem, PhosAgro, Uralchem, Ostchem

North America:
Coverage: 40 companies

Examples: CF Industries, Agrium, Potash Corp (PCS Nitrogen)

Africa:
Coverage: 29 companies

Examples: Bangladesh Chemical Industries (BCIC), Egyptian Fertilizers Company, Egypt HydroCarbon, African Explosives Limited (AEL), Sable Chemical)

South America:
Coverage: 21 companies

Examples: Vale, Petrobras, Caribbean Nitrogen Company, FERTICOL, Petroperu

With actionable insight and analysis of the global nitrogen market, fertilizer producers, consumers, traders, financial institutions and others with a stake in the dynamic fertilizer market will find effective guidance on both production capacity and related consumption forecasts based on exclusive survey data.

Green Markets Global Supply & Demand Models are also available for the Potash and Phosphate (DAP/MAP) fertilizer markets respectively. Industry leaders rely on the models as their detailed monitor of the macro forces shaping global fertilizer markets across the spectrum of fertilizer nutrients, and a harbinger of pricing levels.

For more information, contact Jonathan Wentworth-Ping, Director of Sales, at jping@green-markets.com, or call +1.603-357-8160.


About Green Markets

Since 1977, Your Trusted Source for Fertilizer News, Pricing, Regulation and Supply Chain

Green Markets has been the most trusted, widely read publication for fertilizer business news, analysis and market activities for over 35 years. Our clients are a virtual “who’s who” of the fertilizer industry, including manufacturers, dealers, transportation companies, traders, investment bankers and many others allied to the industry all over the world.

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