Section: CRUFI Comment

T he high-price environment for fertilizers and other commodities, including natural gas, is having very different consequences globally.

In a major blow to the British fertilizer industry, CF Fertilisers UK announced the closure of its Ince production site in north-west England in June (see p8). Ince is the UK’s largest compound fertilizer producer, operating three NPK+S units. It also manufactures large volumes of ammonium nitrate (AN) for Britain’s farmers. At the heart of the Cheshire complex is Ince’s long-standing ammonia plant. Unfortunately, high natural gas costs have kept this shuttered since September last year.

The war in Ukraine has caused 9,000 civilian deaths and created 5.7 million refugees. If this immense and spiralling human tragedy was not enough, the unprecedented shock inflicted on commodity markets continues to unfold.

Argus Media’s Alistair Wallace assesses how exposed fertilizer and fertilizer raw material markets are to the conflict in Ukraine.

Ammonium nitrate (AN) is valued as a nitrogen fertilizer and mining explosive. Consequently, it is also widely traded and distributed globally. Some 20 percent of the 49 million tonnes manufactured annually is shipped around the world and stored in warehouses at various ports and inland destinations.

Are we on the verge of a fertilizer production, trade and supply crisis? Some usually sober and authoritative voices seem to think so.

2021 is turning out to be a very good year for profits and earnings. Take Nutrien and Yara International, for example, the fertilizer sector’s two biggest companies by market capitalisation.

In 2019, the EU fertilizer market was valued at around e17 billion, with France, Germany and former member state the UK together representing 40 percent of this total.

As recently as five years ago, decarbonising fertilizer production was little more than an aspiration.

Fertilizer markets are rallying to an extent not seen in almost a decade. This is primarily being driven by strong demand fundamentals, with crop prices moving to their highest point since 2013. But low pipeline inventories and supply disruptions have also played a part. In this guest editorial, CRU’s Chris Lawson explains what’s driving this rally and highlights the key supporting factors.