Nitrogen markets, and urea in particular, have been impacted by a series of geopolitical shocks in recent years which have driven markets over and above normal market factors such as feedstock and shipping costs, crop prices etc.
For many years confined to pilot projects and feasibility studies, biomass based gasification is seeing rapid take up in China for methanol production and may mark a new era in syngas generation.
A market already characterised by tight supply has been thrown into chaos by the Iran war and reduction of phosphate exports from the Gulf at the knock on effect on sulphur prices, a key input into MAP/DAP production.
Australia’s federal government has selected the Murchison Green Hydrogen project in Western Australia as one of four pilot projects under its newly launched Investor Front Door initiative, a scheme designed to streamline regulatory approvals and fast-track major projects deemed to be in the national interest, the government announced 9 April. The Murchison project, which will use wind and solar energy to produce large-scale green ammonia, is intended to serve as a model for commercial-scale green hydrogen development in Australia and to generate green export opportunities to markets in Asia and Europe. Murchison, being developed by Copenhagen Infrastructure Partners’ (CIP), is expected to have a total production capacity of roughly 1.3 million t/a of green ammonia. The first phase of operations is due to begin in 2029.
CF Industries has delayed a planned multi-week maintenance turnaround at its Donaldsonville, Louisiana complex, the world’s largest ammonia production facility, in response to the supply disruption caused by the Strait of Hormuz closure, the producer announced in a press release. The company said the decision is expected to make approximately 100,000 tonnes of additional granular urea available to US customers during the spring application season. CF Industries added that it is also prioritising new sales to domestic customers over higher-priced export orders for the duration of the spring planting season.
HyOrc Corporation says that it has signed a project development and technology agreement with Bulgaria-based OnEnergy Group to develop a waste-to-methanol facility. Under the agreement, HyOrc will serve as the technology partner for Stage 3 of the project, which focuses on thermochemical conversion of refuse-derived fuel (RDF) into green methanol. The facility is designed to process approximately 50,000 t/a of RDF, operating around 330 days per year with a daily throughput of approximately 150-155 t/d. Expected methanol production capacity is approximately 38-42 t/d (13,200 t/a), subject to final engineering configuration.
SABIC Agri-Nutrients Company says that it has received approval from the Saudi Ministry of Energy to allocate feedstock required for the construction of its seventh plant in Jubail Industrial City. The new facility will produce approximately 1.2 million t/a of ammonia and 2.6 million t/a of urea, increasing the company’s urea production capacity from 4.8 million t/a to 7.4 million t/a; a 54% increase. This is expected to strengthen its position as one of the world’s largest producers and exporters of nitrogen-based nutrients, in line with its 2040 growth strategy.
The start of May saw urea prices start to decline from the yearly highs seen in mid-April, as buyers from India, the US, and Europe stayed away from the markets. India is not expected to return with another tender before late May or early June at the earliest, after booking 2.5 million tonnes for shipment through mid-June, covering immediate requirements, and with domestic production having improved and stocks at a healthy level of over 7 million tonnes. In the US, earlier concerns over May shipments have eased, with net import figures not as low as initially feared, and even some re-export of cargoes to Latin America where higher prices can be earned. With the potential for China to return to export sales towards the end of May and start of June, there was at least a hope that the worst of the current price spike may be over.
Yara Australia’s Pilbara facility is expected to remain offline for around two months following a power outage at the site. The incident is understood to have damaged some systems at the facility and that repair work is now required. Initial assessments are indicating a prolonged curtailment of both ammonia and technical ammonium nitrate production.
• Short-term outlook: Ammonia benchmarks are expected to remain under upward pressure. The PAU turnaround removes a key supply source from an already tight SE Asian market.