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Strong fundamentals kick-start US investment talk

Exploitation of unconventional gas resources has driven the Henry Hub gas benchmark price to tumble to below US$2/MMBtu in Q2 2012, giving North American nitrogen producers gas prices below some nitrogen exporting countries such as Russia.

This is a dramatic change from the high North American gas costs of the previous few decades and is likely to support a whole new phase for the nitrogen industry.

In the latest edition of Integer’s Nitrogen Cost and Profit Margin Service we reveal how the US, reliant on ammonia and urea imports, is now looking to kick-start brownfield and greenfield projects beyond the recent investment by Iowa Fertilizer Co., which was announced in February 2012.

Are low gas prices and location premium creating the conditions to overcome growing capital cost and economic uncertainty to stimulate investment in the US? Our Nitrogen Service identifies a strong case to support the expansion of US nitrogen capacity in the medium term.

“Falling gas prices coupled with strong domestic and international nitrogen prices secured windfall profits for producers in 2011” says Integer Research Director of Fertilizers, Oliver Hatfield. “North America was the second most profitable region globally, after the energy-rich Middle East. There are robust economic fundamentals supporting the expansion of North American nitrogen capacity.”

Integer Research - FertilizersDevelop your future strategy with our global guide to the industry
The Nitrogen Cost and Profit Margin Service looks at achieved product prices and profit margins, to show you which producers are the most and least profitable, and the financial health of the whole industry. It uses this information to examine the business case for new investments and examine how the industry supply curve will develop in future.

Unique to the service are cost curves, which employ a top down and bottom up methodology. These are taken from Integer’s database of production, cost and financial information, covering all nitrogen products for every major producer, in every major producing country around the world.

Find out more or call +44 207 503 1265 or email Account Manager kristian.wyatt@integer-research.com for a detailed demonstration.

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