Category: Middle East

The Jordan Phosphate Mines Company (JPMC) has signed a supply agreement with Germany’s LUMA-International Company.Under the terms of the agreement, JPMC will sell 850,000 t/a of phosphate rock to the German company at international market rates. The agreement was signed by JPMC CEO Abdulwahab Rawad and managing director of LUMA-International Ralf Keller, in the presence of JPMC Chairman Muhammad Thneibat. Thneibat expressed hope that the deal would open wider scopes of cooperation between the JPMC and German companies in the field of phosphate fertilizers, and Keller likewise said that his company was looking forward to more cooperation with the JPMC and new partnerships to produce phosphoric acid and phosphate fertilizers.

Switzerland-based EuroChem Group AG says it has entered into exclusive negotiations to acquire the nitrogen business of the Borealis group, after having submitted a binding offer. One of Europe’s leading fertilizer producers, Borealis operates fertilizer plants in Germany, Austria and France, as well as more than 50 distribution points across Europe. It supplies 3.9 million tonnes of fertilizer products per year, including 800,000 t/a of technical nitrogen solutions and 150,000 t/a of melamine via the Borealis LAT distribution network. It is a market leader in melamine, with its operations in Austria and Germany supplying primarily the woodworking industry. EuroChem says that melamine and technical nitrogen solutions represent important new business lines for the company to expand its nitrogen-based product portfolio in Europe.

INEOS says that it is aiming to forward its plans for a ‘net zero’ future for its Grangemouth site in Scotland by inviting major engineering design contractors to tender for the next stage of the design of a world scale carbon capture enabled hydrogen plant and associated infrastructure.

Russia’s invasion of Ukraine, the consequent sanctions imposed by European and North American countries, and fears over further sanctions and a widening of the conflict have had sent a systemic shock through the world trading system. Stock markets dropped sharply, and the Russian rouble lost 30% of its value. The most immediate short and medium term impact is likely to come from Russian banks being cut off from the SWIFT international payment system, making exports of commodities more difficult, although no direct restrictions or embargos have been imposed on Russian products as of time of writing.

Yara and Lantmännen have signed an agreement to bring fossil-free mineral fertilizers to market.

The International Fertilizer Association (IFA) has signed a memorandum of understanding with the United Nations Food and Agriculture Organisation (FAO) over collaboration to support the FAO’s vision of transformative change and innovation in agriculture. Svein Tore Holsether, IFA Chair, signed the agreement at a live virtual signing in December together with FAO deputy director general Beth Bechdol. The agreement outlines collaboration to further shared goals and objectives with regard to the promotion of sustainable food and agriculture. Both parties will work together to raise awareness about the International Code of Conduct for the Sustainable Use and Management of Fertilizers (Fertilizer Code), promote education and knowledge transfer and continue their successful collaboration on fertilizer statistics.

Global demand for oil products has seen strong recovery in 2021, but depressed kerosene demand from the aviation sector continues to be a major barrier to full recovery, according to data and analytics company GlobalData. The company’s analysis of oil product flows suggests that when kerosene is excluded, oil product demand in Q3 2021 had fully recovered compared to the same period in 2019. However, demand for kerosene, mostly used for jet fuel, has hovered at around two thirds of pre-Covid-19 levels throughout the year, and when that is taken into account, total oil product demand was 3% below pre-Covid levels for Q3 2021. Kerosene demand saw the greatest impact from Covid-19 due to restrictions on air travel. While the sector recovered, to an extent, in the second half of 2020, recovery stalled in 2021 due to new waves of infections and restrictions, with new restrictions linked to the Omicron variant likely to have hit demand again in Q4.

Like the vital nitrogen fertilizer they handle, seasonal cheer will be in short supply for Europe’s ammonia producers and buyers this festive season, after many difficult months in which upward price trajectories showed no sign of slowing.

Rapidly escalating natural gas prices forced plant closures across Europe during September. Worst affected was the UK, where a fire at a cross-Channel electricity cable and low output from wind energy has, combined with low domestic storage capacity led to a surge in demand for gas for power stations and wholesale gas prices reached a record 350 pence per therm (equivalent to $46/ MMBtu) in October. On September 15th, CF Industries announced that it was halting operations at both its Billingham and Ince fertilizer plans due to high gas prices. Although ammonia prices have also risen, they have not kept pace with gas price rises, and there is a limit to what farmers could be expected to pay. CF CEO Anthony Will said: “$900 is the gas cost in a tonne of ammonia and the last trade in the ammonia market that was done was $700 a tonne”. As these plants supply most of the UK’s carbon dioxide for food and drink manufacture, the government said it would provide “limited financial support” to keep the Billingham plant operational, and that plant re-started on September 21st. Meanwhile, BASF closed its Antwerp and Ludwigshafen plants in Belgium and Germany due to what the company called “extremely challenging” economics. Fertiberia ceased production at its Palos de la Frontera site in Spain, and Puertellano remained down for scheduled maintenance. Yara shut 40% of its European ammonia production in September, and OCI partially closed its Geleen plant in the Netherlands. Achema in Lithuania decided against restarting its ammonia plant following maintenance in August, and OPZ in Ukraine shut one ammonia line at Odessa, with Ostchem and DniproAzot likely to follow. Borealis in Austria also reduced production.

China’s private sector Shenghong Petrochemical refining complex is targeting a startup in late November, following the receipt of its first cargo of crude in October. The greenfield refining complex in the eastern Lianyungang petrochemical zone has a capacity of 16 million t/a, including a 320,000 bbl/d crude unit – the largest single stream CDU in China – and a 76,000 bbl/d naphtha reformer. Product capacities include 56,000 bbl/d of gasoline, 41,000 bbl/d of diesel and 32,000 bbl/d of jet fuel. Construction began in mid-2019, delayed from 2018 by late approval of its environmental impact assessment, but has been achieved within two months of the scheduled completion date in spite of the coronavirus pandemic. Shenghong Petrochemical is owned by Eastern Shenghong, a producer of petrochemical products and chemical fibres.