Yara Fertilizer Industry Handbook Yara Fertilizer Industry Handbook

91 Pages·2013·9.29 MB·English

YYaarraa FFeerrttiilliizzeerr IInndduussttrryy HHaannddbbooookk
December 2012
1
LLiisstt ooff ccoonntteennttss
FFertiilliizer iinddustry overviiew

– What is fertilizer? p. 2
– The fertilizer industry p. 16
Fertilizer industry dynamics
 p. 26
– Ammonia pp. 28
– Urea p. 33
Industry value drivers
 p. 39
– Drivers of demand p. 42
– Drivers of supply p. 60
– Price relations p. 67
–– PPrroodduuccttiioonn eeccoonnoommiiccss pp. 7755
Industrial applications
 p. 81
IR –Date: December 2012
What is fertilizer?
3
PPllaannttss nneeeedd nnuuttrriieennttss ttoo ggrrooww
Soil conditions
Nutrient behavior
& other growth
factors
Nutrients have specific

YIELD
and essential functions in plant
mmeettaabboolliissmmss
They cannot replace each

ootthheerr, aanndd llaacckk ooff aannyy oonnee mm
m
s u
nutrient limits crop growth u u i
r i c
o s l
h as Ca
p
t
s o
o P
hh
P
IR –Date: December 2012
4
WWhhaatt iiss ffeerrttiilliizzeerr??
Nitrogen is the main driver of yield
IR –Date: December 2012
5
WWhhyy mmiinneerraall ffeerrttiilliizzeerr ??
Supply of crop residues
and organic fertilizer
NNPPKK
• EExportt off nuttriientts
N K with the harvest
Organic P
substance,
humus S Mg • Growing demand
Mineralisation
…
ffoorr ffoooodd && ffeeeedd
Crop residues are decomposed to minerals
Mineral fertilizers are necessary to replace those nutrients that have been removed from the field
IR –Date: December 2012
6
NNiittrogen – tthhe mostt iimporttantt nuttriientt
Nutrient characteristics
PPriimary
benefit Application Industry structure
Potassium 16%
 Improve  Annual  Fewer suppliers,
((KK))
ccrroopp qquuaalliittyy aapppplliiccaattiioonn pprroodduuccttiioonn
Phosphorus
23% not always discipline
(P)
done
 Increase crop  Annual  Industry more
size application fragmented,
61%
Nitrogen
critical under
 Most important
(N)
ccoonnssoolliiddaattiioonn
aanndd ccoommmmoonnllyy
lacking nutrient  More dynamic
prices, but stable
Total 177 million volume
ttoonnss nnuuttrriieennttss
SSoouurrccee:: IIFFAA ((sseeaassoonn 22001100//1111))
IR –Date: December 2012
7
PPrrooffiittaabbiilliittyy ooff iinnvveessttmmeenntt iinn mmiinneerraall ffeerrttiilliizzeerrss
Yield response (monetary value) to N fertilizer rate
Income
USD/ha Yield, ton/ha  The investment in nitrogen fertilizer
3,000 10.0 is highly profitable for growers
99..00
FFerttiilliizer iinvesttmentt: 225500 UUSSDD//hha

2,500
8.0
Net return: 2,212 USD/ha
7.0 
2,000
6.0
NNeett rreettuurrnn >> 99 xx iinnvveessttmmeenntt

1,500 5.0
4.0
1,000
3.0
22.00
500
1.0
0 0.0
0 50 100 150 200 250 300
Fertilizer application, kg N/ha
SSoouurrccee:: WWiinntteerr wwhheeaatt yyiieelldd ddaattaa:: LLoonngg tteerrmm ttrriiaall, BBrrooaaddbbaallkk, RRootthhaammsstteedd((ssiinnccee 11885566)).
IR –Date: December 2012
8
BBrreeaakkddoowwnn ggrraaiinn pprroodduuccttiioonn ccoossttss
Example: 2012F average US corn production costs
Fertilizers as part of US corn
Seed production costs
15 % 30%
Other
6 %
25%
Fertilizer 20%
2222 %%
Land
23 % 15%
10%
Chemicals
5 %
5%
Power & Machinery
Labour
25 %
5 %
0%
1999 2001 2003 2005 2007 2009 2011 2013F
SSoouurrccee:: UUSSDDAA ((CCoosstt-ooff-pprroodduuccttiioonn ffoorreeccaassttss MMaayy 22001122))
IR –Date: December 2012
9
Nitrates vs. urea
Nitrate is the most important fertilizer in Europe
Urea (CON H ) Ammonium (NH +) Nitrate (NO -)
2 4 4 3
Urea-N needs to be Ammonium-N is fixed onto Nitrate-N is always dissolved
ccoonnvveerrtteedd iinnttoo aammmmoonniiuumm- ccllaayy mmiinneerraallss iinn tthhee ssooiill aanndd iinn tthhee ssooiill wwaatteerr aanndd iiss
N before it is plant therefore immobile. The plant transported passively together
available. roots have to grow actively with the water into the plant
towards the nutrient. root. Thus, nitrate is rapidly
eeffffeeccttiivvee.
IR –Date: December 2012