BC Insight - Nitrogen+Syngas, Sulphur, Fertilizer International
Login
BCInsight Ltd
China Works
Black Prince Road
London, SE1 7SJ
United Kingdom
Tel: +44 (0)20 7793 2567
Fax: +44 (0)20 7793 2577

Publication > Issue > Articles

The emerging force in urea markets

Summary

Egypt now enjoys an increasingly high profile in international fertilizer markets, with three world-scale ammonia/urea complexes already built and more under construction. The factors behind Egypt's growing success story are examined here.

Abstract

The spur to the recent rapid evolution of Egypt’s urea industry has been the ready availability of natural gas. Indeed, new gas fields continue to be discovered, notably in the Nile Delta and offshore, and in the Western Desert. Natural gas production in Egypt roughly doubled from 14.7 billion cm3 in 1999 to 26.8 billion cm3 in 2004. (Egypt: Perfectly Poised? Nitrogen + Syngas, p14 [September-October 2005].) Domestic demand has grown commensurately, and power generation accounts for 65 % of total consumption, leaving an exportable surplus, in the form of liquefied natural gas (LNG).

The Egyptian economy is evolving rapidly to one that can exploit its oil and gas reserves. As yet, the demand for power generation has not swamped all other demands for Egypt’s indigenous natural gas resources, and the major alternative downstream use has been for the production of ammonia and urea. The nascent Egyptian fertilizer industry has furthermore been able to benefit from exceptionally low gas costs, and fixed price gas contracts have been available at $ 1.00/mmBtu or less.

Add to basket


Has the demand ­bubble burst?

Summary

Latin America's economic engine is Brazil, and this is reflected in the fertilizer sector too, especially as Brazilian agriculture has consolidated its competitiveness in international markets. However, the country's recent rapid growth was checked in 2005. Should all the optimistic forecasts for fertilizer consumption in Brazil and the whole of Latin America be revised in the wake of these latest developments?

Abstract

Analysts who have forecast virtually uninterrupted growth for the foreseeable future in Latin Amer­ican fertilizer consumption received a slight jolt, as fertilizer deliveries in Brazil during the first half of 2005 totalled just 5.9 million tonnes – some 27 % below the prior year period when imports reached 8.1 million tonnes. Fertilizer imports into Brazil in January-June 2005 were 34 % lower, at 4.66 million tonnes against first half 2004’s total of 7.02 million tonnes. Has the Brazilian bubble burst, and if so, are there any implications for the rest of Latin America?

Brazil has emerged as Latin America’s economic locomotive. It accounts for 40 % of the continent’s GDP and its economy is the eighth largest in the world. Brazil is also the world’s fourth-largest fertilizer market, accounting for 60 % of total Latin American market volumes. However, the rapid growth in the demand for fertilizers has been checked this year, one major reason being the prevalence of drought and increased fuel and energy costs. Farmers have been unable to offset these extra costs through higher crop prices.

Add to basket


Progress in the Middle East

Summary

A common denominator among the agricultural systems in the Arab countries of North Africa and the Middle East is an increasing drive towards stepping up the production of added value fruit and vegetable crops, as well as horticulture. This sector of agriculture has a very high requirement for micronutrients and other speciality fertilizers in order to enhance product quality. Progress however has been limited, often by the restricted availability of irrigation, but there are encouraging signs of a take-off, especially in Egypt.

Abstract

It is heartening to note the accelerating progress that the countries of the Middle East and North Africa are making to transform their agricultural sectors and overcome many of the region’s historical disadvantages. The agricultural sector remains one of the most important contributors to the Arab countries’ economies, being the primary source of food and job opportunities, as well as a major source of export earnings. (Agricultural Sector, Food Security and Fertilizers Supply and Demand in Arab Countries, Ali Hamdi, Secretary General of the Arab Fertilizer Association [AFA]. Paper presented at IFA Annual Conference, Marrakech, May 2004.)

The Arab countries are characterised by a dry, arid climate, and water is a very scarce resource. Although numerous irrigation projects have been undertaken, notably in Egypt, the Arab agricultural sector remains primarily rain-fed. Traditional methods of production have predominated, and most farmers operate on a very small scale. The paucity of available water is exacerbated by inefficient use. Soil deterioration and a weak infrastructure further compound the difficulties faced by many Arab farmers. Table 1 provides a snapshot of agriculture and land use among the Arab countries.

Add to basket


Buoyant global market fosters new capacity

Summary

Global production of phosphoric acid is forecast to increase by 14 % overall during the next five years. The factors behind this encouraging outlook are reviewed here – but there is one caveat.

Abstract

It has been another good year for phosphate fertilizer producers around the world. The improvements seen in 2004 continued apace last year, and the sustained upward trend in demand has been reflected in world market prices. DAP prices closed the year at around $ 260/t f.o.b. Tampa, slightly below their 2005 peak in October of $ 265/t, but nevertheless an impressive increase of 64% since the start of the recovery in phosphate markets three years ago: in January 2003, DAP prices averaged around $ 159/t f.o.b. Tampa. Prices of phosphoric acid have reflected these gains. In January 2003, the typical price was around $ 250/t P2O5 f.o.b. Morocco. At the end of December 2005, phosphoric acid prices had risen by 50 % to an average $ 375/t P2O5 f.o.b. Morocco.

In 2004, according to IFA, global production of phosphoric acid rose by 5 % to 32.6 million tonnes P2O5, while trade rose by 11 % to 4.9 million tonnes P2O5. The higher volume of trade in 2004 was driven by a sustained recovery in phosphate fertilizer production in India and Pakistan, and there was no loss of momentum in 2005. Provisional figures for the first nine months in 2005 suggest that world production of phosphoric acid totalled around 20.93 million tonnes P2O5, an increase of 3.5 % on the January-September 2004 total of 20.21 million tonnes P2O5. However, this was before Hurricane Rita struck the US Gulf Coast: it remains to be confirmed how much US production was lost during the fourth quarter of 2005. The phosphate plants located in Central Florida were not directly affected by Hurricane Rita: it was the disruption in the supplies of sulphur from Louisiana that compelled several operators to reschedule planned turnarounds at their phosphate fertilizer operations. IFA forecasts that any shortfall in US phosphoric acid production will be offset by higher production elsewhere, with a provisional 2005 total world output of 33.6 million tonnes P2O5, a 3.7 % increase over 2004.

Add to basket


Asia's growing demand for potash

Summary

In spite of some new capacity developments in China, Asia remains the largest consumer and importer of potash in the world, and the area where demand is growing fastest.

Abstract

Potash is, along with nitrogen and phosphorus, one of the most vital of all plant nutrients. Indeed, for crops such as oil palm or rice – both of them important to Asia – it is actually the primary nutrient required. However, unlike nitrogen, which can be produced from any fossil fuel source, or phosphorus rock, which is fairly widely distributed worldwide, the number of countries that have economically-exploitable deposits of potash rock is very small; there are only fifteen with any significant production, mostly in Europe, the Americas, or the Middle East. Further­more, several of the more mature producing countries, like France, are either reaching the end of their reserves or have technical barriers to significantly increasing production – several Canadian mines have had problems with flooding, for example. Inter­national trade is thus dominated by six major producing countries, which operate 90 % of world production capacity: Canada, Russia, Belarus, Germany, Israel and Jordan.

World potash production was put at 54.3 m tonnes KCl in 2005, roughly one third of it from Canada, and operating rates have been at historically high levels (about 85 % on average) as demand continues to rise without there being significant spare capacity in the system. Meanwhile, in Asia demand for potash as a fertilizer has grown rapidly if occasionally unevenly, to the point where the region has become the largest consumer of potash, with around 36 % of world demand, almost doubling its share of the world market in ten years. Asian demand stood at 15.4 m tonnes KCl in 2004. The UN Food and Agricultural Organisation’s predicts potash consumption around the world would continue to grow at a steady rate of 2.7 m t/a, and that 60 % of this growth will occur in Asia. Because Asia produces little of its own potash – in spite of two decades of attempts to develop mines in Thailand’s extensive deposits, only China has significant capacity at present – it is also the major importing region. Canada and the former Soviet countries are the primary suppliers to the Asian market.

Add to basket


Rio Tinto: supply, ­science and ­sustainability

Summary

Rio Tinto Borax is the world's leading supplier of boron fertilizers, a vital micronutrient. Marcos Gutierrez, International Agricultural Products Manager, describes how the company is promoting the increased awareness of boron's role in added-value agriculture.

Abstract

Rio Tinto is a world leader in exploring, mining and processing the world’s mineral resources. Two of these resources – borates and potash – are essential nutrients that farmers around the world rely on to increase crop yield and quality.

A member of the Rio Tinto Group, Rio Tinto Borax is the world’s leading producer of boron fertilizers, and has been so for more than a century. Borax operates Cali­fornia’s largest open pit mines, one of the richest borate deposits on the planet, as well as borate deposits in Argentina. Borax has been at the forefront of crop research since 1940 and continues to break new ground in boron science.

Add to basket


Biomass, energy ­production and the bio-refinery concept

Summary

The use of biomass as a source of renewable energy promises to provide another alternative to fossil fuels, and is furthermore a positive factor in any assessment of the longer-term prospects for fertilizer consumption. However, biomass tends to be a low density and bulky material, for which the handling, storage and transportation are major cost items. Ken Gilbert assesses the merits of biomass in the production of energy and he furthermore examines the concept of bio-refining, whereby a crop could be converted into a range of food, feed, fuel and other chemical products.

Abstract

Biomass has been defined as “the total mass of living matter within a given unit of area.” Biomass is a sustainable resource that is constantly being formed by living entities by the intervention of air (oxygen), carbon dioxide, water, soil and sunlight. Light is particularly important as the potential limit on biomass yield is set by the amount of light available, its efficiency of interception and the efficiency with which intercepted light is converted to biomass. If biomass is not used as food, feed, chemical raw material or as an energy source, it is de­graded in situ by micro-organisms to give its elementary constituent parts – water, carbon dioxide and energy in the form of heat. Carbon dioxide used in its formation is balanced with carbon dioxide released in its degradation, i.e. it is carbon neutral. How­ever, in converting biomass to useful energy products, the amount of fuel used for growing, harvesting, drying, transporting and processing has to be taken into account. The balance between energy in and energy out is crucial. This is where conflict arises between different parties, as was mentioned in the article, Are Biofuels Really An Economical Alter­native? (Fertilizer Inter­national, No. 409, November/December 2005.)

Add to basket


Our word our bond

Summary

The role of today's shipbroker has evolved to meet modern requirements, but the fundamental principles of broking remain in full force, as Lynda Davies explains.

Abstract

The world’s economy could not function if it were not for ships and the shipping industry, the In­ternational Maritime Organization’s (IMO) Secretary-General Efthimios Mitro­poulos said recently. Shipping is the only really cost-effective method of bulk transport over any great distance, with more than 90 % of the world’s trade carried by sea. By the end of 2004, the volume of seaborne trade had reached just short of 25,000 billion tonne-miles, a 50 % increase on that of 1990, representing an average increase of 3 %/year. Much stronger annual growth was seen in 2003 and 2004, with annual rates of 5.7 % and 5 % respectively recorded.

Along with the growth in seaborne trade has come a concomitant growth in chartering business. Despite increasing competition from other maritime centres, London remains one the world’s leading maritime centres and continues to rank first for shipbroking, with a greater concentration of shipbrokers than any other city in the world, as well as for maritime insurance and legal services. London-based shipbroking companies total around 400 with some 2,041 brokers (as at end-2004), and currently handle around 50 % of the chartering for the global tanker market and 30-40 % of the world’s dry bulk chartering business.

Add to basket