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The best of times?

Summary

This review assesses the trends in dry bulk shipping markets, including supply/demand balances by vessel category and asks whether fertilizer shippers have any room for manoeuvre in the present boom market.

Abstract

Since the turn of the 21st century, charterers have seen the dry bulk freight market climb to record highs. This was primarily due to the emergence of China as a key player in the international trade and maritime industries. In addition to China, the Indian subcontinent has been a major factor in the international freight market. The insatiable demand for resources and commodities by both of these countries has caused a major shift in the pricing of freight, while new trade routes have been established as buyers have sourced cargo supply from every possible country with suitable resources. (Canada’s Role in the Global Shipping Market, Eugene Lupynis, Maple Shipping, Canada. Paper presented at IFA Production & International Trade Conference, Vancouver [October 2007].)

The Chinese and Indian take-off gathered pace from 2002/03, since when ocean freight rates have skyrocketed. Past history has shown that drastic market increases are almost always followed by a correction, in which the market falls back to suitable rates for charterers and ship­­owners alike, but this latest boom has been marked by only very brief pauses in the upward momentum of freight rates. Between mid-2006 and the fourth quarter of 2007, there has been only one major decrease, which saw the market fall by 30% in January 2007. An early tumble occurred in the fourth quarter of 2004, but in both instances, the downturn was short-lived and freight rates began to break new records.

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Focus on the Arab Fertilizer Association

Summary

The 14th AFA Annual Fertilizers Forum will be held at the Cairo Marriott Hotel between 5-7 February 2008. In this preview, Mushira Moharam, Head of the AFA Publishing & Documents Section, outlines some of the organisation's key achievements.

Abstract

The Arab Fertilizer Association (AFA) is a non-profit, international Arab organisation that was founded in 1975. AFA comprises companies and institutions working in the fields of fertilizer manufacturing and trading, with a total of 160 member companies representing 30 countries. Tables 1-3 show the impact AFA members have made in global fertilizer markets.

AFA’s mission is the best utilisation of available natural resources, maximising added value while making an effective contribution to economic development in the Arab region. AFA represents a framework in which Arab companies can work with state-of-the-art fertilizer manufacturing technologies, while increasing Arab industry awareness and giving an opportunity to Arab companies’ representatives to strengthen relations between international institutions, organisations and companies working in the fields of fertilizer manufacturing, trading and usage.

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Nutrients for Life makes its mark

Summary

The Nutrients for Life Foundation is a non-profit public education forum that seeks to keep the public thoroughly informed about the vast contribution that fertilizers make to society around the world. It recognised that one unified voice is far more effective than several separate voices. Since it was launched in September 2004 – initially as the Fertilizer Education Foundation – the Nutrients for Life Foundation has been steadily making its mark in the public consciousness and is achieving its major goals.

Abstract

The launch of the Foundation in September 2004 brought together the top echelon of North American fertilizer industry executives, The Fertilizer Institute (TFI), other advocates of educating the public about growing food, and 400 delegates who had gathered at the TFI World Conference in San Francisco that month. The primary goal of the Foundation was to disseminate positive information about fertilizers and modern agriculture to the general public and policymakers.

The Foundation promptly gathered funding for its first year of operations in excess of $1 million, plus pledges of more than $300,000 that were raised during the TFI San Francisco conference. This proved to be a very good omen, as the funds comfortably exceeded the budget that the Foundation had hoped to secure, not only representing a powerful vote of confidence by the partners who set up the new organisation but also enabling it to make an immediate impact in fulfilling its goals.

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The Northwest Passage - not all plain sailing

Summary

At the recent IFA Production and International Trade Meeting held in Vancouver (23-26 October 2007), Eugene Lupynis, of Maple Shipping, Canada, raised the intriguing prospect that the fabled Northwest Passage could soon be open for vessel traffic – a more positive result from global warming and melting ice caps, which could also provide new routes for international shipments of fertilizers. Special correspondent Lynda Davies has investigated further.

Abstract

Last September, the Arctic sea ice shrank to its lowest extent since satellite measurements began nearly 30 years ago, and for a brief period the fabled Northwest Passage across the top of the North American continent linking the Atlantic and Pacific Oceans was technically navigable. Now, the six-month dark season has returned to the North Pole and new ice is spreading over vast stretches of the Arctic Ocean. But the annual trend in diminishing ice cover is expected to continue - albeit with inter-annual variations – and commercial transit through this long-imagined Arctic shipping route no longer appears to be the stuff of ancient mariners’ dreams.

The prospect of an ice-free Northwest Passage - at least in the northern summer months - is drawing attention for its potential to transform global shipping patterns and shave thousands of kilometres from conventional routes, saving shipowners millions of dollars in hire and fuel costs.

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Independence at a premium

Summary

The Russian fertilizer industry remains diversified in terms of its structure, but ownership of the leading producers is becoming increasingly ­con­centrated among a handful of major holding companies. Dr. Nina Khangaldyan, Head of the Marketing Department of CJSC InterGazInvest, assesses the forces at work as the remaining indepen­dent fertilizer producers ponder their future.

Abstract

The Russian mineral fertilizer industry, in common with most other fertilizer producing countries, is characterised by a high degree of concentration, reflecting the specifics of this industry’s development. Today, the top five Russian fertilizer companies account for 80% of all the fertilizers produced in Russia.

The modern company structure of the Russian mineral fertilizer industry basically comprises two types of company:

  • Vertically integrated holding companies (such as EuroChem, PhosAgro, JSC Acron)
  • Large-scale independently owned and operated companies.

Despite the increasing predominance of the vertically integrated companies, a large proportion of the output of nitrogen and complex fertilizers is still supplied by the independent producers. In the potash sector, production is concentrated among just two companies, each of which has access to potash salt raw materials. This review is mainly devoted to the leading independent producers and examines the role that these companies play in the Russian mineral fertilizers industry, the problems they face and their prospects for the medium term.

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A quiet predominance

Summary

The Kingdom of Saudi Arabia is steadily building up its investments in the nitrogen sector and is also set to take the plunge into global phosphate fertilizer markets with the Ma'aden project. This will exploit the vast but remote Al Jalamid phosphate reserves. What impact will these and other developments have on the global market balance?

Abstract

Although it has for long been an official goal of the Saudi Arabian government, the diversification of the Kingdom’s economy has yet to dislodge the petroleum sector from its long-standing predominance. The petroleum sector thus continues to account for around 75% of budget revenues, 45% of GDP and 90% of export earnings. In 2007, non-oil manufacturing contributed just 10% to Saudi Arabian GDP and less than 6% of total employment.

Through successive Five Year development plans, the Saudi government has sought to harness its petroleum incomes to transform its relatively undeveloped, oil-based economy into that of a modern industrial state, with a particular emphasis on relatively high added value production. There has undoubtedly been significant progress, and industry and agriculture now account for a larger share of economic activity, but this has been insufficient to absorb Saudi Arabia’s well-educated and skilled graduate population. Unofficial estimates of unemployment are as high as 25%, exacerbated as more than 35% (around 4.6 million) of the Kingdom’s population in the 15-64 years age group is non-national. Several observers have noted that the mismatch between the skills of Saudi graduates and the needs of the private job market not only remain a major obstacle to economic diversification, but also provide a potential basis for social and political upheaval in the longer term. In such a context, the latest Saudi fertilizer projects have an added urgency.

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Reflections in Paris

Summary

The third biennial British Sulphur Events Phosphates Conference and Exhibition will take place between 17-19 February 2008 at the Hilton Hotel, Paris. It will provide a timely opportunity to assess the future direction of global phosphate markets and the key issues and developments that will affect them. This preview outlines the most important of these issues.

Abstract

British Sulphur Events’ Phosphates 2008 is the only global event dedicated to the fertilizer, industrial and feed phosphate markets, and will bring together senior representatives of the sectors that include mining and beneficiation, phosphoric acid, fertilizers, animal feeds, detergents and other industrial uses. Phosphates 2008 will also provide a forum for those involved in the trading, shipping, inspection and technological research sectors.

The past year has seen an unprecedented increase in phosphate prices in international markets (Fig.1) and the fundamentals are expected to be no less strong during 2008. Consistently firm global demand has boosted phosphate fertilizer prices, as reflected in the surge in DAP prices ex-Tampa. These started 2007 at $255/t f.o.b., ending the year at a record $610/t. This has prompted several industry observers to comment not whether a price ceiling has been reached but just how high the ceiling is. The prevailing opinion is that the direction of international phosphate prices will depend in the immediate term entirely on prices for feedstocks, especially for sulphur.

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New frontiers to exploit the rising market

Summary

Against a background of a tight supply/demand balance, the major potash exporters are stepping up their production capacities, while China is expanding its industry in response to forecasts of strong domestic demand. At least one greenfield potash operation is also forecast to be commissioned during the next five years, the first project of its kind in two decades.

Abstract

Over the period from 2008 to 2012, several significant potash capacity developments are scheduled to come on stream, raising worldwide capacity from 68.7 million tonnes KCl in 2007 to 75.8 million tonnes KCl in 2011, an increase of 7.1 million t/a. This represents an additional 10% of capacity and will be mainly concentrated in Canada and Russia. In addition, China’s potash industry will continue to expand, fuelled by forecasts of strong demand growth. Other new tonnage is expected to come on stream in Jordan, while Argentina may join the ranks of the international potash suppliers. With the exception of China, nearly all of this additional output will be for export.

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Phosphoric acid and uranium recovery – Take 3

Summary

This article by Joseph W. Guida, Process Engineering Supervisor of PegasusTSI, is the first of three on the subject of uranium recovery from phosphoric acid production. These articles are intended to provide an historical perspective on past practices and operating experiences, along with current economic drivers and technical know-how. This first article provides a general overview of the subject; the second article will focus on current market conditions and financial drivers, and the third article will address the technology and past operating experience.

Abstract

It has been more than 15 years since the last phosphoric acid uranium recovery unit was shut down in central Florida. With the current market price of uranium soaring to levels exceeding $130/lb, there is now a renewed interest worldwide in this process. Several phosphoric acid producers are again considering constructing facilities for recovering this mineral from wet process phosphoric acid. If more recovery facilities are built, this will mark the third time in the last 55 years that attempts will have been made to extract uranium commercially from phosphoric acid. Could this be third time lucky?

Interest in uranium contained in wet-process phosphoric acid began as early as the 1940s and process development of solvent extraction methods for uranium recovery dates back to the 1950s, with work done by Dow Chemical Co. and the US Atomic Energy Commission. In the last 55 years, there have been two periods where uranium recovery from phosphoric acid has been performed on a commercial basis.

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