global nitrogen fertilizer demand and supply: trend, current...
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Global Nitrogen FertilizerDemand and Supply: Trend,Current Level and Outlook
Patrick Heffer and Michel Prud’hommeInternational Fertilizer Association
7th International Nitrogen Initiative Conference, 4-8 December 2016, Melbourne, Australia
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GLOBAL NITROGEN FERTILIZER DEMAND
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Evolution of Global Fertilizer Consumption by Nutrient(Tg N+P2O5+K2O)
0
20
40
60
80
100
120
140
160
180
200K2O P2O5 N
Source: IFA, 2016
Global demand: +33% since2000, to 182 Tg in 2013-8% in 2008/09 owing toeconomic downturn… but -2% only for NNutrient trend since 2000:o N: +35%, to 110 Tgo P2O5: +26%, to 41 Tgo K2O: +39%, to 31 Tg
Economicdownturn
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Evolution of Regional N Fertilizer Consumption by Region (Tg N)
0
20
40
60
80
100
120Oceania
West Asia
Africa
E Europe & C Asia
Latin America
W & C Europe
North America
South Asia
East Asia
Source: IFA, 2016
Developing countries = 83% ofthe global increaseEast Asia (+13 Tg) & South Asia(+7 Tg) = 70% of the globalexpansionFastest growth in EECA (+84%)SSA expands quickly since 2008W&C Europe: Only contractingregion
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Country Breakdown of Global N Fertilizer Consumption in 2013/14
31%
15%
11%3%3%
3%2%
2%
30%
China
India
United States
Brazil
Pakistan
Indonesia
Canada
France
ROW
Source: IFA, 2016
China (34 Tg)India (17 Tg)USA (12 Tg)Top-3 countries = 57% marketshareNext 5 markets (2-4 Tg each)= 13% shareTop-8 = 70% share
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Breakdown by Product of Global N Fertilizer Demand in 2013/14
4% 3%
57%6
3%
5%
5%
8%
2% 0%7%
Ammonia dir. applic.
Ammonium sulphate
Urea
Ammonium nitrate
Calc.amm. nitrate
Nitrogen solutions
Other N straight
Ammonium phosphate (N)
Other NP (N)
N K compound (N)
N P K compound (N)
Source: IFA, 2016
N market dominated by ureao Fast increasing urea
market: +54% since 2000o Urea’s share rose from 49%
in 2000 to 57% in 2013Ammonium phosphates: 2nd
fastest growing N market:o +80% since 2000o 8% of current global N uses
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Relative Contribution of the Main Crop Categories to Total N FertilizerConsumption in 2010/11 in the Main Fertilizer Markets
China
India
USA
EU-27
Brazil
WorldWheatRiceMaizeOther CerealsSoybeanOil PalmOther OilseedsFibre CropsSugar CropsRoots/TubersFruitsVegetablesOther Crops
Source: Heffer, 2013
Cereals = 55% of global Nfertilizer uses (58 Tg N)Rice, wheat, maize: 15-18% eachFruits & vegetables: 15%Oil crops: 7%Fibre crops, sugar crops, roots &tubers: 3-4% eachHuge country diversityo Maize: ~50% in the USAo Fuits & veg: >30% in China
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Typical Evolution of N Use Efficiency (NUE) Over Time
Different countries are on different points on the curve
Sub-Saharan Africa
Brazil
DevelopedCountries
ChinaIndia
N Market Share in 2015/16Deved countries 26%China 29%India 14%Brazil 7%SSA 2%ROW 22%
NUE =N output
----------------------Sum of N inputs
Fertilizer-N+ Manure-N recycled+ Crop BNF+ Atmospheric deposition+ (irrigation, biosolids…)
Crop Yield
100%
Adapted from Zhang et al., 2015
Global NUE = 42-47% (Lassalettaet al., Zhang et al.)Largely influenced by crop mix,management practices, policyComplementary indicators needed
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5-Year Outlook for World and Regional N Fertilizer Demand
Source: Heffer and Prud’homme, 2016
0 5 10 15 20 25 30 35 40 45
Oceania
West Asia
Africa
E. Eur. & C. Asia
W. & C. Europe
Lat. Am. & Carib.
North America
South Asia
East Asia
Av. 2013/14 to 2015/16Variation in 2020/21
Global N demand seen up 1.2%per year, to 117 Tg by 2020P and K demand grow faster(1.7% and 2.3% per year);reflects improving NUE andN:P:K balanceGrowth driven by 3 regions: 74%share of the anticipated growthNo growth in China half ofworld market is “mature”Africa, Latin America and EECAseen expanding faster
19%19%
Top-3 = 74%Top-3 = 74%19%19%
35%35%
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Projections to 2030 for Global N Fertilizer Demand (Tg N)Under Three Different Economic Growth Scenarios
101115 124
3
83
6
0
20
40
60
80
100
120
140
2010 2020 2030
Fast, 6% per year
Base, 4% per year
Slow, 2% per year
Real
Source: Integer and LMC, 2013
Harvested area: +185 mill habetween 2010 and 2030(mostly grains and oilseeds)Projected increase in applicationrates, moderated by NUE gainsN demand: +1.3%/year, to 132Tg by 2030 (range 124-138 Tg)vs. +1.9% for P and +3.3% for KChina and India to play lessprominent roleCereals and fruits/veg drivedemand expansion
Crop-based projections
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GLOBAL NITROGEN FERTILIZER SUPPLY
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World Ammonia Capacity (Tg Ammonia-N)
-
20
40
60
80
100
120
140
160
180
200 OtherCoal ChinaCoal ROWNatural gas
Source: Prud’homme, 2016
Ammonia: the raw material for mostN fertilizersAccess to abundant, affordableenergy supply is criticalo Natural gas: 72% of the global
ammonia feedstock; bulk offuture growth
o Coal: 26% of the feedstockOutlook: Global capacity seen up 9%bw 2015 and 2020, to 189 Tg No in Africa, West Asia, North
America, EECAo mostly from natural gas
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China Ammonia Production Capacity (Tg N)
-5
101520253035404550556065 Natural gas
Coal
Source: Prud’homme, 2016
Recent consolidation of theChinese N fertilizer industryChina currently accounts for95% of global coal-basedammonia capacityCoal-based ammonia ~82%of total Chinese ammoniacapacity in 2016Share of coal seen stablebetween 2016 and 2020
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Global Energy Use Efficiency in Ammonia ProductionResults of the 2012 IFA Benchmarking Survey
Source: IFA, 2014
Fertilizer production uses ~1.2%of world’s total energyOf which ~90% is used forammoniaLarge gains in energy efficiency(adoption of advancedtechnologies)New plants performing close tomaximum efficiency
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World Ammonia Production by Region (Tg N)
0
20
40
60
80
100
120
140 Oceania
East Asia
South Asia
West Asia
Africa
Latin America
North America
E. Europe & C. Asia
Central Europe
West Europe
Source: IFA, 2016
Heavy investments in newcapacity following 2007/08Global ammonia production:+29% bw 2003 and 2013, to 140Tg NStrongest growth in East Asia:+51%, +18 TgRapid expansion in West Asia:+120%, +7 Tg
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World Urea Supply (Tg N)
0 2 4 6 8
10 12 14 16 18 20 22
2003
2005
2007
2009
2011
2013
Oceania East Asia South Asia West Asia Africa Latin America North America E. Europe & C. Asia Central Europe West Europe
0 2 4 6 8
10 12 14 16 18 20 22
2003
2005
2007
2009
2011
2013
Source: IFA, 2016
World urea production: +46% bw 2003and 2013, to 78 Tg N; Bulk of theincrease in East Asia and West AsiaGlobal urea trade: +55%, to 21 Tg N in2013Export growth largely captured byWest Asia; export growth also in EastAsia (China’s shift from net importer tonet exporter)South Asia accounts for most of theglobal import expansionOutlook: Global capacity seen up 10%bw 2015 and 2020, to 109 Tg N(mostly Africa, North America, EECA)
World Exports World Imports
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Projected Evolution of Regional N Balances (Tg N)
-9
-6
-3
0
3
6
9
12
15
18
2014 2019
Thou
sand
s
EECA
West Asia
Africa
Central Europe
Latin America
East Asia
Oceania
North America
West Europe
South Asia
Source: FAO, 2016
Faster growth of industrial uses vs.fertilizer uses of ammonia and ureaPotential supply seen rising fasterthan demandWorld potential N surplus projectedto grow from 10 to 15 Tg N bw 2014and 2019Potential surpluses seen to furtherincrease in EECA, West Asia, AfricaPotential deficit forecast to furtherexpand in South AsiaPotential deficit in North Americawould sharply decline
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IN SUMMARY
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Key Take Home Messages
FERTILIZER SUPPLYFollowing 2007/08, heavy industry invest-ments in new ammonia and urea capacityto secure supply for the coming decadeInvestments in countries with abundantaccess to natural gas reserves, and inlarge fertilizer-consuming countriesSouth Asia, especially India, to remain themain importing marketEECA and West Asia to strengthen theirposition as leading net exporters
FERTILIZER DEMANDWorld N fertilizer demand projectedto steadily increase, at least until 2030N demand growth rate seen slowingdown vs. historical trend (reflectingNUE gains)Declining weight of Asia, andincreasing contribution of LatinAmerica and AfricaIndustrial N uses growing faster thanN fertilizer demand
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SALES2014 value of sales
from fertilizer producers:US$172 bill
Of which sales valueof US$84 bill forstraight N fertilizers,US$25 bill forMAP/DAP and US$26bill for NPKs
EMPLOYMENT
926,000 jobs inproduction around the world
N sector directlyemploying 482,000 workers+ 31,000 for MAP/DAP and112,000 for NPKs
Fertilizer industryresponsible 2.3 mill jobsdirectly and indirectly
INVESTMENT
Industry to investUS$83 bill in revampsand expansions in 2015-2019
Anticipated investmentsof US$43 bill in straight Nfertilizer capacities, US$3bill in MAP/DAP andUS$2 bill in NPKs
Source: Integer Research for FA, 2016
The Global Fertilizer Industry at a GlanceMacro-Economic Indicators