non-agricultural markets for nitrogen - firt fot - non...market size and breakdown non-agricultural...

Non-Agricultural markets for nitrogen Adam Panayi – Senior Research Analyst

TFI Outlook and Technology Conference

19 November 2013, Tampa Marriott Waterside Hotel & Marina, Tampa, Florida

www.integer-research.com

The secret life of nitrogen

Nitrogen has a diverse and often prosaic range of uses outside of agriculture


Agenda

• How big is the market?• Global breakdown and key industrial applications

by nitrogen product• North American breakdown • Focus on industrial urea and DEF in North

America

Global Non-agricultural N Market size and breakdown


Non-Agricultural demand historically has accounted for 18% of total nitrogen consumption globally

Source: IFA, Integer

AmmoniaUrea

ANAS

Other

110

25

Agricultural and non-agricultural nitrogen usage by product, Million N tonnes, 2012

0.4

3.0

8.0

6.0

ASANAmmonia Urea

Global ammonia breakdown and industrial applications


Non-agricultural demand accounts for roughly 20% of global net ammonia consumption – 7 million product tonnes, with a broad range of applications

Source: Integer

Industrial applications for Ammonia

Industry Applications

Chemical processing Manufacture of textiles and plastics through the use of acrylonitrile (ABS) and caprolactam (Nylon)

Power generation NOx abatement – stationary

Food and beverage manufacturing, petrochemical industries, IT

Refrigeration/ cooling

Metallurgy Metal treatment - nitriding, annealing etc

Water and wastewater treatment pH control

Petroleum industry Neutralising acid constituents of crude oil and protection of equipment from corrosion

Metals and Mining Extraction of metals such as copper, nickel and molybdenum from their ores

Rubber industry Stabilization of natural and synthetic latex to prevent premature coagulation

Pulp & paper industry Pulping wood and as a casein dispersant in paper coating

Leather industry Curing agent


We estimate that 75% of industrial ammonia consumption is for chemical processing


25%

75%Chemical processing

Other industrial

Non-agricultural net ammonia usage, Million tonnes, 2012

• Ammonia used for the production of caprolactam -for the manufacture of nylon –and acrylonitrile - for the production of ABS plastics –accounts for the lion share of industrial ammonia demand. Approximately 7 million tonnes.

• The next largest area of usage is NOx abatement for industrial activity.

7 million tonnes

Global urea breakdown and industrial applications


Industrial demand accounts for around 11% of urea consumption worldwide, around 18 million product tonnes

Source: Integer

Industrial applications for urea


Wood-working Resins and adhesives

Chemical processing Melamine

Automotive and Industrial pollution controls Environmental controls

Medicine and cosmetics Hydrazine

Water treatment Cyanuric acid

Specialty fertilizer Foliar applications


UF and MUF resins represent just over 80% of the industrial urea market globally

7%

84%

4%

5%

Others

SCR

Feed

Resins

Non-agricultural urea usage, Million tonnes , 2012

18 million tonnesSource: IFA, Integer

• Just over 80% of consumption is represented by resins. UF and MUF resins are used by the wood-working industry as adhesives and glues in furniture and buildings.

• The second largest use for urea in industrial applications is as a protein supplement in animal feed

• Growing fast, the third use is as urea solution or AUS 32 in SCR-equipped vehicles, targeted at lowering NOxemissions from on and off –highway vehicles, as well as from stationary sources such as power stations, cement factories and industrial boilers and incinerators. SCR is also a good choice to meet 2014 GHG targets.

• Other uses include pharmaceuticals and other minor segments.

Global AN breakdown and industrial applications


Non-agricultural demand for AN accounts for around 25% of total demand, 10 million product tonnes, and is primarily consumed by the mining sector for explosives

25%

75%Agricultural

Industrial • Ammonium nitrate is the main component of an explosive Ammonium Nitrate Fuel Oil. It is an explosive mixture which is used widely in mining.

• ANFO is composed of 94%ammonium nitrate and 6% fuel oil. The ammonium nitrate serves as the oxidizing agent for the fuel.


39 million tonnes

Agricultural and non-agricultural AN usage, Million tonnes, 2012

Global AS breakdown and industrial applications


Industrial demand for ammonium sulphate comprises less than 8% of total consumption, around 2 million tonnes

Industrial applications for AS


Food and beverages Food additive as an acidity regulator in bread and flour

General manufacturing and industrial

Used as a flame retardant

Healthcare Used as an ingredient in vaccines to fractionate complex protein mixtures

8%

Non-agricultural

Agricultural

92%

Agricultural and non-agricultural AS usage, Million tonnes, 2012

22 million tonnesSource: IFA, Integer

Non – agricultural nitrogen market in North America


In North America industrial demand for nitrogen accounts for around 20% of total demand

ASAN

Ammonia

Urea

Agricultural consumption

Other

Agricultural and non-agricultural nitrogen usage by product, Million N tonnes, 2012

13.7

3.3

0.1

0.4

1.0

1.2

UreaAmmonia ASAN



We estimate that industrial demand accounts for 23% of all net ammonia consumption in North America


Net ammonia usage, Million tonnes, 2008-2012

5.04.5

5.6 5.34.8

1.5

1.3

1.71.6

1.4

2012

6.2

2011

6.9

2009

5.8

2008

6.5

2010

7.2Agricultural demandIndustrial demand


We estimate that industrial demand accounts for 17% of all net urea consumption in North America


Net urea usage, Million tonnes, 2008-2012

9.6 9.211.1

10.111.4

1.81.7

1.71.8

2.3

2008 2009 2010

11.912.8

10.911.4

2011 2012

13.7Agricultural demandIndustrial demand


We estimate that industrial demand accounts for 25% of all net AN consumption in North America


Net AN usage, Million tonnes, 2008-2012

3.32.7

3.3 3.4 3.4

1.1

0.9

1.1 1.1 1.1

4.5 4.5

2008 2011

4.4

2010

3.6

2009

4.4

2012

Industrial demandAgricultural demand


We estimate that industrial demand accounts for 8% of all AS consumption in North America


AS usage, Million tonnes, 2008-2012

3.0 2.83.1

3.3 3.6

0.30.2

0.30.3

0.33.63.9

2008 2011

3.3

2010

3.0

2009

3.3

2012

Industrial demandAgricultural demand

Focus on urea and DEF


In North America, the share of resins has shrunk since the peak of urea consumption in 2006/2007. Environmental use is the fastest growing

59%

15%

9%

15%

2% Stationary SCRMobile SCROthers

ResinsAnimal Feed

2012: 2.3 million tonnes

• Resins and glues/adhesives used to represent 80% of the market for industrial-grade urea in North America before the recession of 2008/2009 took hold of the building and construction industries, prompting a major step change in consumption for these products.

• Demand for all types of resins, adhesives and sealants used in the building and construction sectors peaked in 2006-2007, with the abrupt end of the housing boom and has shrunk dramatically since 2008 and 2009, in some extreme cases even by as much as 50% in some areas of the region, and at least by 30% in others.

• SCR applications - stationary and mobile -are now a larger segment for urea consumption and represent around 24% of the market. Cattle feed comes in at around 15% and pharmaceuticals and others at 2% - with pharmaceuticals accounting for around 1.4%.



Environmental uses are likely to continue to drive industrial urea growth in North America but resins have recovered with the economy

0.2

0.4

0.6

0.8

1.2

1.4

1.6

1.8

2.2

2.4

2.6

2.8

2.0

1.0

0.0

+7%

201520142013201220112010

Resins

Animal FeedStationary SCRMobile SCROthers

Million tonnes



Influencing factors for environmental uses: legislation

NOx Abatement Legislation timeline (USA)

Application Legislation Targets Start date

ON-HIGHWAY APPLICATIONS Use of DEF compulsory to reduce NOx emissions

New heavy-duty vehicles EPA 2010 - January 2010

OFF HIGHWAY APPLICATIONS Reduction of NOx and other pollutants

Ag/construction and mining machinery

Transition 2010-2014 from T4interim to T4 final

STATIONARY APPLICATIONS NOx and mercury emissions reduction

Power plants ‘Transport Rule’ approved 2010 and aiming to reduce NOx emissions by 52% by 2014

NOx and mercury emissions reduction

Cement factories Approved 2010 to reduce mercury, soot, smog and NOx

emissions. Comes into effect 2013

NOx and mercury emissions reduction

Industrial boilers and waste incinerators

Approved 2011 to establish work practice standards. Public review closing July 2011

MARINE APPLICATIONS Reduction of NOx and other pollutants

Ships and ocean-going vessels

US EPA Tier 4 from 2016 for US flagged vessels

Source: U.S. EPA, Integer


Urea demand for use in DEF is forecast to rise with the off-highway sector expected to rise sharply

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

20162015201420132012

on-highwayoff-highway

Urea consumption for use in DEF in North America, Million tonnes

Source: Integer


The shift in market structure towards environmental uses for urea has also been in part due to a fall in consumption into resins falls in 2008-2009 as housing starts collapsed following the financial crisis

Source: US Census Bureau, Integer

US housing permits (monthly series), ‘000 units

0

50

100

150

200

250-81%

01. Jan

2012

01. Jan

2011

01. Jan

2010

01. Jan

2009

01. Jan

2008

01. Jan

2007

01. Jan

2006

01. Jan

2005

2,000

1,500

1,000

500

0

-33%

20102007 2008 2009

Urea consumption into resins, ‘000 tonnes



However, there has been a strong revival in housing permits in 2012, continued into 2013, how will this affect resin demand going forward?

US housing permits (monthly series), ‘000 units

0

10

20

30

40

50

60

70

80

90

100

+33%

Aug-13

Jan-13

Jan-12

Jan-11

Jan-10

Source: US Census Bureau, Integer Industrial Urea Market Report

Thank you!

For more information:[email protected]

Data and analysis from:Nitrogen Cost & Profit Margin ServiceIndustrial Urea Market SurveyAdBlue & DEF Monitor/DEF TrackerThe Emerging DEF Market

non-agricultural markets for nitrogen - firt fot - non...market size and breakdown non-agricultural...

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