Fertilizers

MUMBAI (ICIS)–India’s merchandise exports in April grew by 9% year on year to $38.5 billion, while the trade deficit for the month widened to $26.4 billion due to high imports of petroleum products, official data showed. The trade deficit in March 2025 was $21.5 billion, according to data from the Ministry of Commerce. “Last year, there were many problems. Trade route was a big problem with ships forced to avoid the Red Sea. There were supply issues. Cost of transport and insurance increased. But Indian exporters have shown that they have achieved resiliency in their business,” Indian commerce secretary Sunil Barthwal said during a press briefing. “India’s trade performance in April underscores the robust fundamentals of Indian exports despite global headwinds, including geopolitical tensions, inflationary trends, and supply chain disruptions,” Federation of Indian Export Organisations (FIEO) president S C Ralhan said. India’s merchandise imports in April rose by 19.1% year on year to $64.9 billion, with crude petroleum and products imports up by 25.6% at $20.7 billion, official data showed. Higher imports, particularly of capital goods and energy raw materials, reflects improving domestic demand and capacity expansion, FIEO chief Ralhan said. Meanwhile, trade with the US has increased in April, India’s commerce chief Barthwal said. India expects to conclude the first phase of the trade deal with the US by October this year, with an official Indian team expected to visit the US this month for trade talks. The south Asian nation expects to increase bilateral trade with the US to more than $500 billion by 2030. During his state visit to Qatar on 15 May, US President Donald Trump was quoted in the media as saying that an agreement with India is close. India’s April exports of petroleum products rose by nearly 4.7% year on year to $7.37 billion, while those of organic and inorganic chemicals dropped by around 9.1%, to 2.27 billion. Exports of pharmaceutical products rose by 2.4% to $2.49 billion. April man-made fabrics and yarn exports increased by 4.2% to $383.8 million, while plastics shipments rose by 4.6% to $696.4 million. Meanwhile, April imports of organic and inorganic chemical rose by 10.9% year on year to $2.45 billion, while those of artificial resins and plastic materials rose by 14.2% to $1.95 billion. April fertilizer imports rose by 10% to $653.6 million, while imports of chemical material and products more than doubled to $1.97 billion. Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.

16-May-2025

LONDON (ICIS)–Ridley Corporation has agreed to acquire Dyno Nobel’s fertilizer distribution business for (Australian dollar) A$300 million, the Australian animal nutrition company said on Monday. The deal to buy IPF Distribution includes an option to acquire its Geelong North Shore property for A$75 million. The Phosphate Hill fertilizer manufacturing operations, and the closure and remediation costs associated with the Gibson Island and Geelong manufacturing operations are excluded from the deal, Ridley said. IPF Distribution is part of Incitec Pivot Fertilisers, a manufacturer and distributor of fertilizers within the wider business of explosives maker Dyno Nobel. Completion of the transaction is expected by Q3 2025 and no later than 30 November, subject to certain agreed conditions.

12-May-2025

HOUSTON (ICIS)–CF Industries said in its latest nitrogen fertilizer market outlook that in the near-term it expects the global supply-demand balance to remain constructive. The producer highlighted in its earnings release that global pricing was supported in Q1 of 2025 by positive global demand, constrained availability due in part to natural gas shortages in Iran, and China’s continued restrictions on urea exports. CF said there is anticipated strong demand from not only global corn stocks-to-use ratio reaching its lowest level since 2013, but because there is below average global inventories and challenging production economics in Europe. Looking at North America, CF said there should be strong nitrogen demand during the spring application season due to favorable returns for corn compared to soybeans, which is driving higher planted corn acres in 2025. The producer noted that the US Department of Agriculture (USDA) reported in March that growers intend to plant 95.3 million acres of corn this season. For Brazil, the company expects the country will remain the largest urea import region, with imports projected to exceed 8 million tonnes, with this outlook supported by strong planted corn acreage and continued nominal domestic nitrogen production. In India, there is less urea inventory with CF saying that lower-than-targeted domestic production and higher year on year urea sales pushed urea inventory levels down by approximately 35% compared to March 2024. As a result, their management expects higher urea import requirements for the rest of this year to meet grower demand and replenish urea stocks. Across Europe the producer is projecting that ammonia operating rates and overall domestic nitrogen product output will remain below historical averages over the long-term given the region’s status as the global marginal producer. For China, CF said the ongoing urea export controls continue to limit availability from the country with minimal volumes concluded in Q1 of 2025. The company feels that urea exports will not resume until the conclusion of China’s domestic spring application season at the earliest. In Russia, urea exports are expected to increase 3% in 2025 due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase Russian fertilizer, including the US and Brazil. CF also is expecting that over the medium-term the significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist. As a result, the global nitrogen cost structure would then remain supportive of strong margin opportunities for low-cost North American producers. In the longer-term view CF is projecting that the global nitrogen supply demand balance will further tighten as global capacity growth over the next four years is forecasted to not keep pace with the expected rise in global demand. Those needs are anticipated to have a growth rate of approximately 1.5% per year for traditional applications and see more new demand emerging for clean energy applications. CF has a view that global production will remain constrained by poor margins for European ammonia producers and availability of natural gas in Egypt, Iran and Trinidad.

08-May-2025

SAO PAULO (ICIS)–Brazil’s chemicals production structural woes, such as high production costs, remain while imports continue making their way unabated, despite protectionist measures deployed by the government, according to the director general at producers’ trade group Abiquim. Andre Passos said chemicals plant capacity utilization remains at lows hovering around 60%, an unsustainable rate for the long term which requires Brazil focuses more on the feedstocks available for  its chemicals industry, and increasing natural gas production remains Brazil’s pending task, said the Abiquim head. While Brazil’s state-owned energy major has become a key global crude oil producer, successive governments in Latin America’s largest economy have sidelined natural gas production despite the country’s large reserves of it. As US natural gas production boomed in the 2010s, the petrochemicals industry went through a revival thanks to the abundant and cheap supply of ethane or propane – one of the routes for chemicals production – for decades to come. As the US’ ethane-based production boomed, production via crude oil’s naphtha route – predominant still in Latin America, as well as Europe and Asia – became less competitive: that is the crossroads the industry must face in coming years. STILL STRUGGLING, DESPITE STATE HELPAbiquim successfully lobbied in 2024 for the Brazilian government to increase import tariffs on dozens of chemicals, aiming to slow down the entry of cheaper material from abroad – some of it, dumped by large producers such as China and the US. Other market players, big importers such as plastics transformers – represented by trade group Abiplast – or importers of industrial chemicals – represented by trade group Associquim – have said the higher import tariffs have been passed onto customers already. That has been one of the reasons why Brazil's inflation rates are creeping up, the head of Associquim, Rubens Medrano, said in an interview with ICIS,  but Abiquim's Passos said this has not been the case, citing an Abiquim-funded study showing his side of the argument. The cabinet has also implemented or is mulling anti-dumping duties (ADDs) in materials from both the US and China and, on top of that, a tax break for chemicals producers called REIQ was reintroduced by the current administration of Luiz Inacio Lula da Silva. The government has also taken initial steps to expand the natural gas market, easing regulations and mandating Petrobras to step up its game in the sector. Equally, deals to bring more gas from Bolivia’s dwindling reserves were signed in 2024, and chemicals producers are also putting hopes in Argentina’s Vaca Muerta fields. Most of these actions would show results in the medium and long terms. In the here and now, none of them have helped ease chemicals producers’ challenging operating conditions, said Passos. "Nothing has fundamentally changed in our situation in the past few months. The scenario remains the same, perhaps even worsening with [US President Donald] Trump's trade measures, and we continue suffering with low capacity utilization rates: Brazil's chemical production has been on a downward trajectory since 2016,” said Passos. “Up to that point, both chemical production and imports grew in tandem with overall consumption. But a structural shift occurred in 2016: imports continued to increase, capturing more market share, while domestic production began to decline. And so here we are, nine years later, and the clearest indicator is the capacity utilization level of our plants, which has been falling sequentially. From above 80% before 2016, it dropped to 70% and now even below that at around 60%." There are two root causes for this downturn, said Passos, one created abroad and over which Brazil cannot do very little part from imposing hefty import tariffs – US and China overproduction which makes imports into Latin America more likely – and the other, equally hard to crack, is Brazil’s lack of natural gas and, more widely, feedstocks for chemicals production. IT IS (ALMOST) ALL ABOUT GASBrazil's chemical industry's competitiveness problem is directly linked to feedstock costs: 80% of production costs for fertilizers and 50-60% for polymers come from raw materials, Passos explained, and despite some regulatory changes, gas prices remain stubbornly high, around four or five times higher than in the US. And the fundamental issue is, of course, price. US gas prices stand at around $3.30/MMBtu. In Brazil, they are around $15/MMBtu. Passos and Petrobras established a working group in 2023 to study potential chemicals sector-specific programs the energy major could develop, mostly related to natural gas. However, a nearly two-year long silence followed, but Passos said there should be news from Petrobras on this front in a few weeks’ time. "The gas market in Brazil has seen marginal movement. There's been the creation of a free gas market, which was important. But what we see is that gas supply in Brazil remains constant [at not high enough levels]. This price level puts Brazilian producers at a significant disadvantage compared to US competitors – and this gap has existed for years and remains painfully constant,” said Passos. "We've presented [to Petrobras] all the information about the chemical industry, consumption profiles, volumes that could be involved in a natural gas contract, etc. Now, we're waiting for Petrobras's response regarding the product they will offer to the chemical sector as a bloc – our expectation is that Petrobras will present a proposal as soon as this month.” However, Passos acknowledged progress has been slow, adding that no measure by itself is to be a miracle for chemicals production in Brazil as the sector carries on its back decades of its global competitiveness being dented, as other countries’ production rose sharply, gaining market share. Abiquim’s head provided a historical perspective for this. Brazil built its petrochemical industry in earnest from the 1960s on, a model which lasted until the 1980s and based on a partnership between private actors and the Brazilian state through Petrobras. This "Chinese model," as he described it, changed in the mid-2000s, when Braskem – of which Petrobras is the second largest shareholder, with nearly 40% ownership – was formed. But Braskem remains, to this day, fundamentally a polymers producer, a sub-sector in which the global overcapacities are hitting especially hard. "A private company became the majority owner in petrochemical centers and in the manufacture of thermoplastic resins. Petrobras remained a strategic partner, but not the controlling partner. This shift created problems in negotiating raw material prices and availability of ethane and natural gas – there is a dynamic of trying to maximize margins at each stage of the production chain, and this strains the model," said Passos. AND THEN IT IS ALSO ABOUT CHINAChina continues to place competitive pressure on Brazil's chemical industry through what Passos describes as persistent dumping practices, adding that even after import tariffs were hiked, Chinese imports into Brazil have continued as their prices continued to fall, offsetting the higher import tariffs. “And then, due to the tariff war between the US and China currently brewing, freight rates have also plummeted as the reduction in goods trade between the two countries have made more ships available. So, at least in the short term it looks like there will be greater availability of freight in various routes, so shipping prices may fall further. “So, Chinese or US product is expected to continue coming into the Brazilian market, deepening the troubling trends: producers int hose countries will now have cheaper freight rates and cheap product to be exported: this remains the big risk for Brazilian producers." However, trying to see a silver lining in a rather downbeat assessment, Passos said that, if US-China trade tensions escalate, there could be knock-on effects that benefit certain segments, because China has reduced imports of US ethane and propane, the latter also a natural gas-based feedstock used in the petrochemicals industry. “If this scenario continues to worsen, there will also be excess ethane and propane in the US market, therefore the price will fall and that could make more feedstock available for us here in Brazil,” he said. THE NEW HOPE: PRESIQIn April, Brazil’s parliament passed a bill called Special Program for Sustainability of the Chemical Industry (Presiq in its Portuguese acronym) which resembles the US Inflation Reduction Act (IRA) or the EU’s Green Deal plans announced in or after the pandemic – public support in the billions of dollars for companies to set up greener production facilities. Faced with the structural challenges explained, Abiquim lobbied for the bill as it sees it an opportunity for Brazilian chemicals production to jump into the greener future – perhaps its last chance to be a global player the sector, he said. Starting in 2027, after the tax break REIQ expires in 2026, Presiq has budgeted up to nearly reais (R) 4.0 billion/year ($704 million/year) for financial credits, the main target being the acquisition of feedstocks by chemicals producers. It also contemplates up to R1.0 billion for investment credits, which also applies to fertilizer projects, a sector in which Brazil’s trade deficit has only deepened as the country became one of the world’s breadbaskets – around a quarter of its GDP now comes from the agribusiness. Within the nearly R4.0 billion Presiq is to offer in credit lines for chemicals producers to purchase natural gas-based feedstocks, the funding will be distributed between the purchase of ethane, propane and butane (R2.0 billion/year), plus another R1.9 billion/year for the acquisition of ethylene, propylene, and butene, among others, according to figures compiled by Brazil’s gas trade group Abegas. The bill will also offer up to 3% of the value of the investment in expansion of installed capacity, or projects which meet other program guidelines. “The Brazilian chemical sector is facing a delicate moment, aggravated by the trade war between the US and China. The government’s measures to strengthen the national chemical industry such as tariffs and others have helped to slow down the downward trend chemicals production is suffering, and if these measures hadn't been taken, more chemicals plants would have had to shut down,” said Passos. “But Brazil also needed an incentive program mirroring those of our global competitors such as the US or the EU. Of course, China's incentives go further and are basically subsidies unprofitable plants to keep people employed, but that another matter. "More in line with the US or the EU, Presiq will help reduce the deficit in the chemical industry, and it could become an important source of revenue. It will also add value to the country through the sustainable use of natural resources. Presiq could be the chemicals industry’s savior,” concluded Passos. ($1 = R5.67) Front page picture: Chemicals facilities in Brazil Source: Abiquim Interview article by Jonathan Lopez

02-May-2025

LONDON (ICIS)–Europe melamine editor Melissa Hurley interviews senior editor Sylvia Traganida, deputy managing editor Deepika Thapliyal, and market reporters Joy Foo and Connor Phillips. Market factors to consider ahead of May: Asia melamine market grappling with weak demand and increasing supply Asia exports dropped in March but expected to flow into Europe in May/June Reduced melamine supply in Europe offset by ongoing sluggish demand conditions No tariff impact on US melamine so far Global urea demand expected to slow from H2 May China not resuming urea exports yet despite the domestic season ending Subdued European ammonia demand; waiting for nitrates market to pick up Natural gas TTF prices soften, but European fertilizer producers reluctant to ramp up production due low demand To listen in a separate window, click here. Additional reporting from Sylvia Traganida, deputy managing editor Deepika Thapliyal, market reporters Joy Foo and Connor Phillips.

29-Apr-2025

SINGAPORE (ICIS)–Canadian ammonia exports are exempted from the prohibitively high levy imposed on Canadian exports to the US, thanks to the US-Mexico-Canada trade agreement. However, the trade tensions would inevitably motivate Canada to be less reliant on its closest neighbour market and accelerate diversification of its ammonia exports to Asia from the Prince Rupert Port in western Canada. Stronger push for Canada to diversify ammonia exports despite US tariff exemption Prince Rupert Port – an emerging low carbon ammonia export and bunkering hub US Gulf Coast low carbon ammonia projects to face strong competition Prince Rupert Port has the shortest shipping distances between North America and Asia hence its direct shipping route to Asia stands to undermine the competitiveness of low carbon ammonia exports from the US Gulf Coast. Besides comparatively longer shipping distances, shipments from the US Gulf Coast to Asia have also been faced with seasonal congestions at the Panama Canal. Key industry stakeholders in Japan and South Korea have been in talks with US companies to jointly produce low carbon ammonia in the US Gulf Coast States of Texas and Louisiana for export to Asia. Among the announced US projects, the joint venture between Japan’s largest energy company JERA Company (JERA), global investment and trading company Mitsui & Company and US fertilizer producer CF Industries have progressed to Final Investment Decision. The first ammonia exports from Prince Rupert Port to Asia are likely to be low carbon trades spearheaded by two of Japan’s largest trading houses Itochu and Marubeni. Low carbon ammonia exports from Prince Rupert Port would position Canada as a key stakeholder in an emerging low carbon commodity ecosystem comprising major bunkering hubs such as Amsterdam, Algeciras, Singapore and Port Zayed, key exporters including the UAE, Saudi Arabia, Qatar, Oman, Egypt, India, Malaysia, Thailand, Indonesia, Australia and the US, and importers including countries in Europe, Japan and South Korea (please see map below). Note: Includes proposed and ongoing investments Low carbon ammonia supplies via the Prince Rupert Port will also facilitate development of a low carbon marine fuel bunkering service that could potentially be in direct competition with the proposed low carbon bunkering services at the US ports of Los Angeles and Long Beach. Demand for low carbon ammonia bunker fuels on the US west coast is expected to be driven by car-carrying vessels calling at Port Bernicia and container vessels at Port Oakland. The Canadian government has been inviting foreign investments to develop a new liquid chemicals export route from the Prince Rupert Port as the port has been seeing declining trades volumes in recent years due to shifting global trade flows and competition with other North American ports. AltaGas and Royal Vopak are jointly building an export facility on the Ridley Island, British Columbia, that includes a large-scale liquefied petroleum gas (LPG) and bulk liquids terminal with rail, logistics and marine infrastructure. As vessels can be configured to alternate between LPG and ammonia cargoes, ammonia can be one of the outbound trades to benefit from the export facility at Ridley Island. While diversifying overseas markets to pre-empt risks, including tariff or non-tariff trade barriers, would make sense for any exporters, it is particularly crucial for ammonia producers as stringent safety standards for the transportation and handling of ammonia means alternative export channels are not easily set up. Canada exported about 1.08 million tonnes of ammonia to the US last year, around 19% of its total annual ammonia capacity of about 5.62m tonnes, and almost all Canadian ammonia exports have been for the US market at least since 2020, according to the ICIS Supply and Demand database. With contributions from Kieran Cosgrove, Song Hea Beom and Sylvia Traganida INSIGHT article by Chow Bee Lin

25-Apr-2025

MUMBAI (ICIS)–Two oil refineries will be built in India as part of Saudi Arabia’s $100-billion investment pledged to the south Asian nation which would cover cooperation in multiple areas, including energy and petrochemicals. High-level joint task force finalizes plans for joint cooperation in multiple sectors Both countries to develop supply chains, projects linked to energy sector Green hydrogen infrastructure collaboration plans on The projects, which will be built in partnership with the Indian government, and agreements to enhance cooperation with the world’s biggest crude exporter across various industries were announced on 22 April, during a state visit by Indian Prime Minister Narendra Modi to Saudi Arabia. Collaborations are also planned in the pharmaceuticals, infrastructure, technology, fintech, digital infrastructure, telecommunications, manufacturing and health sectors, among others, according to a statement from the Prime Minister’s Office (PMO) of India on 23 April. In 2023, the two countries agreed to set up a joint committee to expedite Saudi Arabia’s $100-billion investments in India which was announced in February 2019. A high-level task force set up by the two countries has now finalised plans in multiple areas which will allow both countries to begin work soon, the PMO stated. The countries will also work towards developing supply chains and projects linked to the energy sector, it added. The two nations have agreed to enhance cooperation in the supply of crude oil and its derivatives, including liquefied petroleum gas (LPG), the government statement said, adding that collaborations in the field of green hydrogen, including developing hydrogen transport and storage technologies, would also be explored. Saudi Arabia is India’s fourth largest trading partner and is the third largest exporter of crude oil to the south Asian country. In the fiscal year ending March 2024, India’s goods imports from Saudi Arabia stood at $31.4 billion, while exports to the nation were at around $11.6 billion, official data showed. Its major exports to Saudi Arabia include petroleum products, engineering goods, rice, chemicals, textiles, food products while imports from Saudi include crude oil, liquefied petroleum gas (LPG), fertilisers, chemicals, plastics, among others. RATNAGIRI MEGA REFINERY PROJECT IN QUESTION About seven years ago, Saudi Arabia signed a deal with Indian refiners to build a mega refinery and petrochemical complex in the west coast of India, but the project hit a snag. The 60 million tonne/year project in the Maharastra state which was estimated to cost $44 billion to build was supposed to be commissioned by 2022, faced delays due to land acquisition problems. Opposition to the project continues and there has been no breakthrough in discussions with villagers in the area. There was no official announcement from the central government on the fate of the proposed Ratnagiri mega-refinery and petrochemical project. Maharashtra chief minister Devendra Fadnavis, in a February 2025 interview at an Indian daily Economic Times, had said that instead of one mega refinery project, three small ones will be built – one in Ratnagiri and the other two will be in two other states in southern India. The refineries will each have a 20 million tonne/year capacity, he said. Indian petroleum minister Hardeep Singh Puri in January this year announced plans to build smaller refineries at different locations in the country. Focus article by Priya Jestin

24-Apr-2025

MUMBAI (ICIS)–State-owned National Fertilizers Ltd (NFL) plans to acquire an 18% stake in a proposed joint venture (JV) that will build a 1.27 million tonne/year urea plant at Namrup in India’s eastern Assam state. NFL plans to invest Indian rupees (Rs) 5.72 billion ($67 million) in the Namrup IV Fertilizer Plant, the company said in a disclosure to the Bombay Stock Exchange (BSE) on 18 April. The state government of Assam will hold a 40% stake in the proposed joint venture; with NFL and Oil India Ltd (OIL) each holding an 18% stake. Hindustan Urvarak & Rasayan Ltd (HURL) will own 13% and Brahmaputra Valley Fertiliser Corp (BVFCL) will have the remaining 11%. The project, which will be set up within the complex operated by BVFCL, is expected to cost Rs106 billion, it added. The plant is expected to be commissioned within 48 months of the project launch, NFL said, adding that once operational, the plant will help meet the growing demand for urea in northeast India. The Indian government approved the proposal for the new project on 19 March 2025 as part of its effort to reduce urea imports. Indian finance minister Nirmala Sitharaman had announced the project during her budget speech on 1 February 2025. It will be the eighth plant with the same capacity that will be built in the south Asian country since 2019. ($1 = Rs85.12)

21-Apr-2025

SAO PAULO (ICIS)–Brazil's chemicals industry is facing its worst performance in 30 years, with the producing companies in the sector operating at just 60% of installed capacity during January and February, the country’s trade group Abiquim said. According to the Abiquim-Fipe Economic Monitoring Report (RAC), all key indicators showed a decline in the two-month period, year on year: production fell by 5.6%, domestic sales dropped 0.8%, and national demand for industrial chemical products decreased by 4.0%. As domestic producers' market share diminishes, imports continue reaching Brazil’s shores at pace, with the country’s chemicals trade deficit continuing to increase. In the 12 months to February 2025, it reached $49.59 billion, up from $48.68 billion in the same 12-month comparable period a year prior. Imports now represent 49% of total domestic demand, with significant increases in thermoplastic resins (28.3%), other inorganic products (26.7%), and organic chemicals (25.1%). IDLENESSChemical plants’ 40% idleness average level in January-February was the worst recorded since data collection began in 1990, said the trade group, which represents mostly chemicals producers. Some product groups posted even higher idleness rates, such intermediates for fertilizers (44%), intermediates for plastics (48%), intermediates for synthetic fibers (41%), and intermediates for plasticizers (61%). February’s results were particularly concerning, with production plummeting 10.1% compared to January, domestic sales decreasing 4.5%, and national apparent consumption dropping 17.1%. Abiquim said companies attributed this poor performance to operational problems, idle units, plants in hibernation, low demand, raw material restrictions, electricity supply variations, and fewer operating days in February. Despite the clouds, prices for chemical products rose 5.1% between January and February 2025, with real prices increasing 3.6% when accounting for inflation. In dollar and euro terms, real prices are 11.3% and 11.2% higher, respectively, compared to 2024. Abiquim’s executive president, Andre Passos, preferred to see the glass half full – despite all evidence pointing to it being half empty – and said two state programs for the chemicals sector had the potential to turn things around by the end of this decade and “save” Brazilian chemicals. Passos said the breaks on some input materials, called REIQ, including provisions linking tax incentives to investments, was a re-implementation linked to investments to create new or expand existing capacities. Passos added that, only in 2025, companies could invest up to Brazilian reais (R) 1 billion thanks to the provisions included in the REIQ bill. ‘SAVE THE SECTOR’This week Abiquim focused on another bill, the Special Program for Sustainability of the Chemical Industry (Presiq). The Presiq acronym may be heard more often from now on if what Abiquim’s Passos said about it comes to pass – if implemented in full and correctly, Presiq could become the savior the struggling chemicals industry has for years been looking for. Earlier in April, Brazil’s parliament passed what could be considered the country’s response to the EU Green Deal or to the US IRA, now in danger of extinction: widespread tax incentives for companies going greener and embracing low-carbon processes and technologies. Presiq itself is an ambitious project which, beyond attracting more low-carbon investments, aims to bring the sector to near full capacity, targeting 95% utilization rates by the end of this decade. Presiq has two financial lines – one aimed at credits for the purchase of less polluting inputs and raw materials, such as natural gas versus other more polluting fossil fuels; secondly, the program will offer investment credits of up to 3% of invested value for petrochemical plants and chemical industries committed to expanding installed capacity. Starting in 2027, Presiq budgeted up to R4 billion for financial credits, and up to R1 billion for investment credits. “The Brazilian chemical sector is facing a delicate moment, aggravated by the trade war between the US and China. The government must take urgent measures to strengthen the national chemical industry, just as its international competitors have done with incentive programs,” said Passos. "The new law [Presiq] will help reduce the deficit in the chemical industry, and it could become an important source of revenue. It will also add value to the country through the sustainable use of natural resources. This plan can save the sector." Front page picture: Chemicals facilities in Brazil Source: Abiquim ($1 = R5.93)

16-Apr-2025

SINGAPORE (ICIS)–Arab Gulf (AG) ammonia annual average export price is forecast to ease further this year (see Chart 1) as producers are expected to keep prices competitive to maintain market shares in Asia, particularly as weak Asian demand for industrial applications including acrylonitrile (ACN) and caprolactam (capro) have capped ammonia prices. AG ammonia producers are expected to maintain its export prices in 2025 at just below parity with southeast Asian producer with FOB AG at around 97% of FOB SE Asia prices (see Chart 2) to optimize returns while keeping market shares in their key India and Taiwan markets. AG ammonia producers’ netbacks in Taiwan and India in 2025 are projected to return to levels similar to 2020 before the Russian-Ukraine war with AG FOB at around 89% and 84% of CFR Taiwan and CFR India prices, respectively (see Chart 3) Asia remains an important market for AG producers particularly when their returns from Europe have been shrinking. AG ammonia producers’ FOB netbacks from Europe is expected to remain constrained in 2025 with the FOB AG annual price hovering at around 63% of the CFR NWE annual price, following two years of higher returns in 2022 and 2023. (see Chart 4) AG ammonia producers have not been exporting much to Europe except for 2022 and 2023 when outbreak of the Russia-Ukraine conflict and subsequent sanctions on Russian exports created a window of opportunity for AG producers. (See Chart 5) Europe ammonia import prices are expected to remain elevated as high natural gas prices had led several ammonia plants in the region to be permanently shut in 2022, with the ammonia prices remaining tied to the prices of key exporters Trinidad and Algeria. Egypt also exports ammonia to Europe, but its production has been susceptible to disruptions caused by natural gas shortages as seen in Q3 last year and February this year. Europe import prices are expected to ease if Russia resumes exports to Europe hence a burning question for importers is when Togliattiazot’s (TOAZ's) export terminal at Russia’s Taman Port would start loading ammonia. TOAZ is part of the Uralchem Group, and the terminal was expected to start loading ammonia in Q1 this year. Ammonia is a feedstock for inorganic fertilizers such as urea and ammonium sulphates and chemicals such as acrylonitrile (ACN). With contributions from Song Hea Beom, Sylvia Traganida

28-Mar-2025