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Publication > Issue > Articles

Pointers for 2014

Summary

We assess the key issues for nitrogen, phosphates and potash supply and demand, including the potential impact of new investment on overall market equilibrium.

Abstract

As the outgoing 2013 gave way to a new year, few in the fertilizer business mourned the old year’s passing. It had been another year of disappointing demand, notably from India, and soft prices, prolonging a trend that first became apparent in 2012. Among the individual nutrient segments, nitrogen had a lacklustre year, with distortions in the urea market arising from the surge of product during the second and third quarters as a result of the Chinese export window, while the hitherto orderly marketing that distinguished the potash sector was overturned in the wake of the bitter split between erstwhile export sales partners Uralchem and Belaruskali. Keywords: Outlook, China, Russia, Brazil, India, Saudi Arabia, Latin America, US Gulf, Belaruskali Uralchem Export window, Subsidy, Ammonia, Urea, Phosphates, DAP Sulphur, Potash, Natural gas, Projects

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The Arab fertilizer industry extends its reach

Summary

The Arab Fertilizer Association (AFA) will hold its 2014 Fertilizer Forum between 25-27 February in Sharm El-Sheikh, the City of Peace by the Red Sea. The main conference location is the Savoy Hotel and Resort. We preview the conference agenda and highlight continuing advances in the Arab region fertilizer industry.

Abstract

Dr. Shafik Ashkar, Adviser to the AFA Board said, “The AFA event has promptly become a fixture in the fertilizer calendar and is one of the most important global networking fertilizer events, in addition to being a perfect opportunity to exchange views with hundreds of industry representatives from around the globe. The 2014 event is expected to bring together a global audience of over 600 senior fertilizer executives from the production, consumption and trading sectors, embracing the most influential Arab, international companies and organisations within the fertilizer industry from across 40 different countries.” Keywords: AFA, Conference, Outlook, Ammonia, Urea, Phosphoric acid, DAP, Sulphur, Potash, Capacity, Project, MENA, North Africa, Algeria, Egypt, Qatar, Morocco, Jordan, Saudi Arabia, Tunisia, Abu Dhabi, Ma’aden, Investment, Downstream, Investment, JV, Joint venture

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Sorfert makes its mark

Summary

A milestone development in the nitrogen fertilizer sector was the launch of commercial production at the Sorfert ammonia/urea complex at Arzew, Algeria. This joint venture with Orascom Construction Industries of Egypt will raise Algeria's profile in international markets.

Abstract

Algeria is the largest producer of natural gas in Africa and the second largest oil producer in the continent, after Nigeria. The country has an estimated 12.2 billion barrels of proven oil reserves as at 1 January 2013 and produced 1.87 million barrels/day of total petroleum liquids in 2012. Proven natural gas reserves are estimated to total 159.1 trillion ft3 (tcf), the ninth largest reserves in the world. The Hassi R’Mel gas field is Algeria’s largest and is located in the centre of the country. It holds reserves of about 85 tcf, more than half of Algeria’s total proven gas reserves. The remainder of Algeria’s total proven natural gas reserves come from associated fields (alongside crude oil reserves) and non-associated fields in the southern and south eastern areas of the country. (US Energy Information Administration [EIA].) Keywords: Algeria, Orascom, Arzew, Ammonia, Natural gas, LNG, Urea, Project, Technology, Pumps, Shiploader, Exports, Sub-Saharan Africa

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Are investors getting cold feet?

Summary

Current capital markets are very challenging for the promoters of new-venture fertilizer investment projects. We assess what public market investors seek before they commit themselves to new fertilizer projects.

Abstract

Speaking at Phosphates 2013, Glen Gatcliffe, managing director of the Agriculture & Fertilizer Group of BMO Capital Markets, outlined Equity Markets and Financing Phosphate Developers. He noted that current capital markets are very challenging for the developers of phosphate and other fertilizer projects, commenting that publicly-listed phosphate development companies had not performed well lately and that market capitalisations had been marked down sharply. This pattern continued throughout 2013. As a result of oversupply concerns in all primary nutrient fertilizer markets and weaker market prices, access to public capital has largely dried up. Phosphate and potash resource development projects are better placed, Gatcliffe argued, if the developers have secured strategic partners who have pledged joint-venture investment and offtake agreements. Keywords: Investment, Stock market, CAPEX, JVs, Equity, Debt, Cash flow, Project, Potash, Phosphates, Greenfield, IFC, Offtake, Finance

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Global gas review

Summary

Ammonia and urea producers face increased competition from power generation and other industries for natural gas feedstock. Other new sources of gas are meanwhile being tapped for nitrogen fertilizer production, notably in Latin America and Africa. We assess the impact of developments in gas markets on the nitrogen fertilizer industry worldwide.

Abstract

The Big Story of the most recent years has been the transformation of the US energy market as a result of the discovery and harnessing of large reserves of shale gas, changing the country overnight from being a net importer of natural gas to one with an exportable surplus. These discoveries have in turn transformed the prospects for the US nitrogen industry. Two decades earlier, the prospect of depleted reserves of conventional natural gas prompted US ammonia and urea producers to relocate offshore, closer to more abundant sources of feedstock, most notably in Trinidad and Tobago, while Agrium Inc. was enticed by the prospects of investing in gas-rich Egypt. Closer to home, the commercialisation of US shale gas reserves revived the prospects for investment in downstream ammonia and urea production, and after a hiatus of some 25 years, plans are under way for the development of new indigenous nitrogen fertilizer capacity. Keywords: Natural gas, Energy, LNG, Reserves, Shale gas, Gazprom, Russia, Ukraine, United States, Exports

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Putting all the cards on the table

Summary

Fertilizers Europe hosted a Decadmiation Workshop in Brussels on 2 October 2013 that attracted over 70 participants from knowledge institutes, the European Commission, national authorities as well as the fertilizer industry who debated and discussed all facets relating to the issue of setting cadmium limits in the phosphate fertilizers sold in European markets. The meeting comprised a total of three sessions and a concluding panel discussion, with the purpose of promoting a better understanding between all the interested parties and to seek solutions to a particularly complex problem.

Abstract

Cadmium (Cd) is a trace element that occurs naturally in soils but has no known functions for the plant. It is readily absorbed by plant roots and translocated to above-ground parts. Although the Cd concentration in soils represents only a small fraction of the total soil exchangeable cations, Cd can affect the ecosystem due to its pronounced toxicity even at trace levels. (Revisiting and Updating the Effect of Phosphorus Fertilisers on Cadmium Accumulation in European Agricultural Soils, Prof. Erik Smolders, University of Leuven. Paper presented to International Fertiliser Society [May 2013] (IFS Proceedings No. 724).) Keywords: Cadmium, Decadmiation, Heavy metals, Workshop, EU, Fertilizers Europe, Environment, Phosphates, Phosphoric acid, Phosphate rock, Technology, Calcination, Ion exchange, Precipitation, Solvent extraction, Membrane, Co-crystallisation, Hemihydrate, Phosphogypsum

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NIIK's approach to energy efficiency

Summary

Technology developed by NIIK has extended the operating lives of many urea plants in the Former Soviet Union and enhanced their efficiency and competitiveness.

Abstract

As a leading provider of urea technology to the Russian fertilizer industry, NIIK is offering continuous improvements in energy efficiency, feedstock consumption, environmental performance and safety parameters. NIIK has three proprietary urea technologies and offers its customers state-of-the-art concepts and solutions, both for the construction of new urea plants and for revamps. These technologies are URECON 2006®, URECON 2007® and 90 bar stripping. All three technologies use internal heat recovery as the main method for raising energy efficiency in urea plants. URECON 2006® is an improved TLR technology which proved its efficiency during numerous revamps of older urea plants, reducing specific energy consumption. This was achieved by applying the following technical solutions: Keywords: FSU, Russia, CO2, Urea, Ammonia, Reactor, Carbamate, Gas, Energy, Evaporation, Pre-treatment, HP, LP

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JDCPhosphate starts hot operations

Summary

JDCPhosphate made its first one-shift run of phosphoric acid production at its 12,000 t/a demonstration plant that is trialling the use of the Improved Hard Process (IHP). The initial results demonstrated high-yield phosphorus evolution, combustion and recovery of P values as phosphoric acid. The company is evaluating the performance of the plant and expects to begin a longer run of operations in the near term.

Abstract

The Improved Hard Process (IHP) promises to transform the fortunes of the global phosphate industry, enabling the use of lower-grade rock at a time when reserves of the higher-grade material are diminishing while obviating the co-production of phosphogypsum, which in most countries must be disposed or stacked in piles that incur considerable expenditure. JDCPhosphate is seeking to commercialise the IHP process and has installed a 12,000 t/a P2O5 demonstration plant at Fort Meade, Florida. The plant is a 1:18 scale of an anticipated full-scale plant, but is nonetheless expected to operate as a commercial plant and over time generate a positive cash flow. The Australian company Minemakers Limited has taken a 6.5% stake in JDCPhosphate and is assessing the suitability of applying the IHP technology in its Wonarah phosphate project in Northern Territory. Keywords: IHP, Improved Hard Process, Phosphoric acid, SPA, Pilot plant, Thermal, Phosphogypsum, Demonstration, Technology

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Addressing radioactivity in phosphates

Summary

Due to its chemical properties, phosphate rock may contain quantities of naturally-occurring radioactive materials, prompting concerns about the exposure of workers and the public to radiation from phosphate rock and downstream fertilizers. We outline the regulatory environment, together with the phosphate industry's work on mitigating radioactive emissions from its raw materials and finished products.

Abstract

Due to its chemical properties, phosphate rock may contain significant quantities of naturally-occurring radioactive materials, in particular: l Uranium (and its decay products, including radium) l Thorium (and its decay products). The US Environmental Protection Agency (EPA) assesses uranium (U) concentrations in US phosphate ores in the 20-300 ppm range, while thorium (Th) occurs at essentially background levels, between 1-5 ppm. Keywords: Phosphate rock, Radium, Uranium, Thorium, EPA, Radiation, Yellowcake, Phosphorite, Recovery, DEPA-TOPO, Solvent extraction, Precipitation, Liquid membrane, Purification

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A focus on new markets

Summary

An assessment of the major non-fertilizer phosphates sector, looking at demand, supply, trade and the production technologies involved.

Abstract

The industrial phosphate market is a small but important segment of total phosphates demand, with industrial use accounting for approximately 6-8% of phosphate consumption worldwide. PCS Phosphates estimates that around 40% of industrial phosphate is used to produce detergents and cleaners; food and beverage applications account for more than 20%. Environmental regulations are reducing the amount of industrial phosphates used in cleaners and detergents, leading to a smaller share of total consumption. China is the world’s largest producer of industrial phosphates, accounting for more than half of the global industrial phosphate capacity. North America (mainly the United States and Mexico) accounts for around 16% of global capacity. With the sharp decline of phosphate use in detergents, industrial phosphates producers are now focusing on creating new markets in food and horticultural applications to counter the decrease in demand from the detergent industry. Another new area for potential development is in the production of lithium ion-phosphate batteries: this would depend on how fast the demand and production of electric vehicles expands. Keywords: Phosphates,Industrial phosphates, Feed, STPP, Phosphoric acid, PPA, Detergents, Lithium-ion, Batteries, Metals, LFP, Improved Hard Process, IHP

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Alternatives to potassium chloride

Summary

We assess non-chloride sources of the K nutrient, including potassium sulphate, potassium nitrate, monopotassium phosphate, polyhalite and alunite, all of which offer advantages in certain agronomic conditions.

Abstract

Potassium chloride (KCl) is the least expensive and thus the most widely used potassium source. It has the disadvantage of containing chloride (Cl), which in excess can damage sensitive tree, vine and vegetable crops and many host plants. There is however a wide range of alternative K sources. Potassium sulphate and potassium magnesium sulphate are the most widely produced of these alternatives, together accounting for around 8% of primary potash production of 33.1 million tonnes K2O in 2012. (Table 1) Potassium sulphate Potassium sulphate (SOP, K2SO4) is the most commonly used alternative to potassium chloride (KCl). It is most widely used when the presence of chloride ions can lead to fertilizer burn. Crops which are particularly sensitive to Cl include tobacco, pineapple and avocado. K2SO4 is also effective in sulphur-deficient soils. Fertilizer grades range from 50-54% K2O, and these also contain 17% S as sulphate. In the past, low water solubility limited its use to dry applications and to inclusion in some liquid acid fertilizers. Recent innovations have approximately doubled K2SO4 water solubility, thus enhancing its acceptance in the fluid fertilizer market. (Western Fertilizer Handbook, 9th Edition, World Health Organisation.)

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