Fertilizer Situation & Issues Glen Buckley 2009 Legislative Ag Conference January, 2009.
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Fertilizer Situation & Issues Glen Buckley 2009 Legislative Ag Conference January, 2009
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Transcript of Fertilizer Situation & Issues Glen Buckley 2009 Legislative Ag Conference January, 2009.
FertilizerSituation & Issues
Glen Buckley2009 Legislative Ag ConferenceJanuary, 2009
World Nitrogen Price Index (Average 2003 = 100)
0
100
200
300
400
500
J03 J04 J05 J06 J07 J08
Source: Green MarketsJanuary 2003 Current
Long-Term Trend
Market spikes to record levels
Market collapses
World Nitrogen Demand(MM Metric Tons)
0
20
40
60
80
100
120
140
160
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
NonFerts
Fertilizers
Calendar YearsSource: Fertecon, CRU, CF
1990-20021.1% Growth
2002-073.7% Growth
World Nitrogen Operating Rate
75.0%
80.0%
85.0%
90.0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Calendar YearsSource: Fertecon, CF
MM Tonnes N
World operating rates climb to record levels
Average Rate 1992-2002 = 80.9%
World Natural Gas Prices($/MMBtu)
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
2004 2005 2006 2007 2008
W Europe
U.S.
Ukraine
Russia
Calendar YearsSource: CERA, Fertecon
U.S. Ammonia and Urea Capacity (Million Tons of Product)
0.0
5.0
10.0
15.0
20.0
25.0
98 99 00 01 02 03 04 05 06 07 08
AmmoniaUrea
Calendar YearSource: Fertecon, CF
2000 2008 Change
Ammonia 19.9 11.5 -40%Urea 9.8 6.3 -36%
Perfect Storm - Up
Demand
Crop futures escalate to record levels
World nitrogen import demand soars – concern over supply availability
Supply
China drop out of the market
Record level of unexpected plant outages/turnarounds – Russia, Ukraine, Trinidad, Argentina, Middle East
Freight rates jump to record levels
Dollar continues to decline
0
200
400
600
800
1,000
J07 M M J S N J08 M M J S N Cur
U.S. GulfMiddle EastYuzhny Prills
Source: Fertecon
World Urea Prices ($/Tonne)
“China export tax”
Perfect Storm - Down
Crop futures plummet Credit/Financial crisis hits world market
World fertilizer trade demand comes to a complete halt
Freight rates collapse Inventory in exporting countries soar – force
plant closures Dollar climbs 20%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Q107 Q2 Q3 Q4 Q108 Q2 Q3 Q4
Average = 936,000
Source: Industry Publications
2.59 MM
World Urea Production Outages
(MM Tonnes)
U.S. Nitrogen Supply(MM Tons N)
0.0
4.0
8.0
12.0
16.0
20.0
24.0
98 99 00 01 02 03 04 05 06 07 08
Source: USDC, TFI Fertilizer Year
Domestic Production
Imports
“Imports now account for more than half of total U.S. nitrogen supply”
U.S. Dry Urea Supply (Million Product Tons)
0
2
4
6
8
10
96 97 98 99 00 01 02 03 04 05 06 07 08
Fertilizer YearSource: USDOC, IFDC, TFI
Domestic Production
Imports
U.S. Dry Urea Imports (MM Product Tons)
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
96 97 98 99 00 01 02 03 04 05 06 07 08
Other
China
MiddleEast
Venzuela
Canada
Source: USDC, TFI Fertilizer Year
U.S. UAN Supply (Million Product Tons)
0
2
4
6
8
10
12
14
16
98 99 00 01 02 03 04 05 06 07 08
Capacity
Fertilizer Year
Source: USDOC, IFDC, TFI
Domestic Production
Imports
U.S. UAN 32% Imports (MM Product Tons)
0.0
1.0
2.0
3.0
4.0
96 97 98 99 00 01 02 03 04 05 06 07 08
Other
Romania
Lithuania
Ukraine
Russia
Canada
Source: USDC, TFI Fertilizer Year
World Phosphate Price Index (Average 2003 = 100)
0
100
200
300
400
500
600
700
800
J03 J04 J05 J06 J07 J08
Source: Green MarketsJanuary 2003 Current
S/D Balance Tightens
Market spikes to record levels
Market collapses
World DAP/MAP Demand(MM Metric Tons)
0
5
10
15
20
25
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
Calendar YearsSource: Fertecon, CRU, CF
1990-20011.6% Growth
2001-074.9% Growth
Source: Fertecon, GM
0
100
200
300
400
500
600
700
800
900
J S N J08 M M J S N
India Rock
India Sulfur
Ammonia
DAP Input Cost Into India ($/Tonne)
0
200
400
600
800
1,000
1,200
1,400
Aug 07 May 08 Jan 09
Upgrading
Sulfur
Rock
Ammonia
Source: Fertecon, FMB
India DAP Production Cost ($/Tonne)
0
50
100
150
200
250
300
J F M A M J J A S O N D
2007
2008
Source: TFI, DOC, CF
U.S. DAP/MAP Production (000 Tons P2O5)
Questions?
