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Publication > Issue > Articles

The year ahead: Fertilizer demand to rebound?

Summary

Encouragingly, the International Fertilizer Association (IFA) expects growth to return to the fertilizer market in 2016. We review prospects for the coming year, assessing the key agricultural drivers and weighing-up the latest short-term fertilizer supply and demand forecasts.

Abstract

The fertilizer industry has struggled with deteriorating macroeconomic conditions and a deepening commodities price crash over the last 12 months. Faltering expansion in key emerging economies saw world economic growth weaken as 2015 progressed. The IMF is currently forecasting 3.1% growth in global GDP for 2015, 0.3% less than 2014 growth and 0.4% below the IMF’s April 2015 forecast. More encouragingly, the world economy looks set to bounce-back in 2016 with GDP growth recovering to 3.6% year-on-year. Keywords: 2016, Market outlook, Demand drivers, Trade, Supply, Sales, El Niño, ABN Amro, Rabobank, FAO, USDA, International Grain Council, IGC, International Fertilizer Association, IFA, Mosaic, Cereals, Oilseeds, Oilcrops

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No immediate renaissance for Iran

Summary

The suspension of UN, EU and US sanctions will provide Iran with access to previously blocked export markets and could herald a revival of investment in its fertilizer industry. However, the country's National Petrochemical Company (NPC) recently decided to shelve some urea projects due to excess output and current market conditions. The availability of less-risky investment opportunities elsewhere may also mean that the renaissance of Iran's fertilizer sector is some way off.

Abstract

The potential for nitrogen fertilizer production in Iran is huge, particularly as the country has plans to monetise its vast gas reserves by pursuing an ambitious programme of downstream petrochemical projects. The imposition of increasingly stringent sanctions on Iran in recent years has, however, thwarted such ambitions by stifling foreign investment and the country’s access to global technology and engineering expertise. Sanctions have hit Iran’s foreign earnings particularly badly. As recently as 2011/2012, Iran earned $118 billion from oil and gas export revenues. These revenues fell precipitously to $63 billion in 2012/13, only to decline further to $56 billion in 2013/14, according to IMF figures. Keywords: Iran United Nations Sanctions Joint Comprehensive Plan of Action JCPOA World Bank National Iranian Gas Company, South Pars, National Petrochemical Company, NPC, Pardis, Khorasan, Shiraz, Kermanshah, Razi, Casale, Stamicarbon, Nexant, IFS, Profercy, CRU, Integer Research, ICIS, Nitrogen, Sulphur, Ammonia, Urea, Petrochemicals

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Fertilizers for fine wines and vines

Summary

We look at vital contribution nutrients make to successful grape growing at commercial vineyards across the globe. Wine grapes are grown for the quality of their berries and juice, whereas yield, taste and appearance are the most valued characteristics of table grapes. The application of potassium and nitrogen, in particular, strongly influences wine quality, colour and taste.

Abstract

The global wine industry has overcome adversity and expanded into new regions in 2015. North America winemakers have coped well with low rain levels last year and the industry is continuing to invest in new vineyards in countries such as the UK. California’s vintners, for example, although affected by severe drought, are expecting a stellar 2015 vintage. “The quality of the 2015 vintage for California state-wide is excellent,” said Wine Institute president and CEO, Bobby Koch. Keywords: Table grapes, Wine grapes, Wine, Grapevines, Fertilisation, Nutrients, Micronutrients, Deficiency, Fertilizers, Recommendations, Application, Application rates, Fertigation, Foliar, International Fertilizer Association, IFA, ICL, Tessenderlo, Haifa, Yara

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Cutting and capturing carbon emissions

Summary

Carbon abatement is firmly back on the fertilizer industry's agenda following last year's Paris climate change agreement. Ammonia production is coming under particular scrutiny because of its scale and energy intensity. However, for ammonia plants using the steam methane reforming process, only incremental and limited cuts to carbon emissions are likely to be possible in future. We assess the main technological options for more drastic carbon cutting at ammonia plants, including biomass gasification, electrolysis using renewable electricity and carbon capture and storage (CCS).

Abstract

The fertilizer industry acted with diligence and foresight ahead of the global agreement on climate change that emerged from the UN’s COP21/CMP11 conference in Paris last December. In the weeks immediately prior to the deal being signed, climate change discussions were centre stage at the International Fertilizer Association’s Strategic Forum in Paris in November. Phillip Townsend Associates presented the benchmarking results of IFA’s latest ammonia industry CO2 emissions survey1. CF Industries also gave a paper outlining options for reducing CO2 emissions from nitrogen fertilizer production2. Keywords: Carbon emissions, CO2, Low carbon, Abatement, Energy efficiency, Ammonia, Production, Steam methane reforming, SMR, Benchmarking, Syngas, Biomass, Renewable, Wind, Solar, Hydrogen, Electrolysis, Nuclear high temperature electrolysis, Solid state ammonia synthesis, SSAS, Carbon capture and storage, CCS, Ecofys, Fertilizers Europe, European Chemical Industry Council, CEFIC, Johnson Matthey, Mitsubishi Heavy Industries, MHI, Gassnova, Yara, Bloomberg New Energy Finance, Porsgrunn, Norway

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Unexpected surprises in the phosphates market

Summary

A host of negative drivers conspired to drive down the phosphates market in the latter part of 2015. We discuss changes in the supply, consumption and trade in phosphate products over the last 12 months with Mike Rahm of the Mosaic Company. Fortunately, disappointing Brazilian phosphate demand last year was largely countered by a strong resurgence in Indian buying. Chinese exports also reached new heights, making up shortfalls from other producers.

Abstract

Global phosphate product shipments reached 65.2 million tonnes in 2014, based on the latest estimates from the Mosaic Company and analysts CRU (Figure 1), and are projected to rise by just over 250,000 tonnes to 65.5 million tonnes in 2015. Prospects for 2016 also remain reasonably positive, with phosphate shipments in the region of 66-68 million tonnes anticipated. 2014 sets the scene Looking back, 2014 saw a marked shift in phosphate trade patterns. Chinese exports reached record levels and made significant inroads into increasingly distant markets. Global trade volumes (circa 24 million tonnes) also leapt by 7% (1.7 million tonnes) in 2014, driven by record US imports, growth in Brazil and a moderate rebound in the Indian market. Keywords: Phosphates market, Review, 2015, Import, Export, Supply, Trade, CRU, Mosaic, Maaden, Ma’aden, OCP, India, China, Brazil, United States, US, MAP, DP, TSP, SSP

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Turning capex into cash

Summary

The independence of German producer K+S KALI GmbH, the oldest player in the potash market, was threatened by a takeover bid from Canada's PotashCorp in 2015. The future success of K+S as a standalone business hinges on turning massive capital expenditure on its Canadian greenfield mining venture, the Legacy project, into cashflow. We profile K+S as it seeks to strengthen its competitive position and attempts to become a producer in both North America and Europe.

Abstract

K+S KALI GmbH holds a sizable 8% share of the 68 million tonne world potash market, making it one the largest players globally after the Canpotex producers (PotashCorp, Mosaic and Agrium), Uralkali and Belaruskali (­Fig. 1). The long history and independent status of K+S means it is respected and valued by its customers, suggests Dr Andreas Radmacher, head of potash and magnesium products at K+S: “Potash is a small world and K+S has a good niche position as an independent player. K+S is the oldest player in the potash world which means a lot, especially for our customers.” Keywords: K+S KALI, Germany, Canada, Potash, Company profile, Business performance, Legacy, Earnings, Revenues, Costs, Debt, Strategy

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