Understanding nitrogen market prospects: Underlying energy markets hold the key - Integer
manage you subscriptions
stay where you are
Please note: the downloads on this page may not work on your browser (Internet Explorer 7 or 8 from Microsoft) as we use encryption technology (to make your browsing experience as safe and secure as possible) which is newer than IE7 or IE8 supports.

Rather than downgrade our security, we apologise and request that you update to the latest version – IE11 – or alternatively download Google Chrome or Firefox – which work without issues.

Alternatively, please email
and let us know which download you require so we can send it to you directly.
Your login details:

Read the terms and conditions*

Your interests* - select more than one if necessary
Environment & Emissions
DEF/AdBlue/ARLA 32
Emissions Control Technologies
Marine Emissions
On-Road - Light Duty Vehicles/Passenger car
LNG/CNG/Alternative fuels
On-Road - Heavy Duty Vehicles
Engine/Vehicle Manufacture
Fertilizers & Chemicals
Ammonium Sulphate
Ammonium Nitrate
Phosphate Rock
Potash (SOP)
Potash (MOP)
Sulphuric Acid
Value Added and Specialty Fertilizers
Wire & Cable
Data, signal & control
Enamelled/magnet wire
Fibre optic cable
Fire performance cable
Power cable
Specialty cable
Automotive Cable

Your login details:
Remember me?
forgot password?
Translate Click here to read this in:
Click here to read this in:

Understanding nitrogen market prospects: Underlying energy markets hold the key

Posted On: 19-04-2017 By: Ali Asaadi

Underlying energy markets hold the key to understanding nitrogen prospects

Urea prices increased uninterrupted in the opening weeks of 2017, reaching above US$250 per tonne in February amid temporarily tight supply out of key export regions and a delayed start to seasonal buying. Seen by some as a “bullish” start to the year, the relative run up in urea prices brought a welcome reprieve to producers doing business in early 2017. However, it was certainly not a signal of a complete market turnaround (which some well-meaning but less-informed optimists wrongly perceived it to be).

Integer’s nitrogen market webinar next week will address this and other key issues.

Webinar: Watch live or the recording

>> Click here register for the nitrogen webinar

Topics covered:

  • Key changes in marginal nitrogen production costs
  • Gas market liberalisation – the future of low-cost nitrogen production?
  • The impact of falling oil revenues on nitrogen producers in MENA
  • How do these changes shape Integer’s forecasts?
  • Confidential Q&A session at the end

Already struggling to operate profitably amid a squeeze on weak nitrogen prices and fluctuating coal prices, the Chinese nitrogen sector has also come under increasing environmental pressure. Chinese environment supervision has been strict and frequent since the end of 2016 due to serious problems with smog in the north of China, especially in Beijing.

It is reported that the government will inspect 15 provinces in April 2017, including Hunan, Anhui, Xinjiang, Shanxi, Shandong and Sichuan which are all major nitrogen fertilizer producers. In the middle of February, the Ministry of Environmental Protection of China inspected Beijing, Tianjin and another 16 cities in Hebei and Shanxi provinces, both of which are big urea producing provinces. During the periods of inspection, some urea producers reduce operating rates to avoid problems, but there were no reports that plants stopped production permanently, and so far, there is only modest direct environmental impact on urea production.

Nevertheless, urea producers are still curtailing output due to challenging market conditions. Significant volumes of inefficient capacity were already closed in 2015 and 2016 due to market weakness and fierce competition. We estimate about 4.4 million tpy of urea capacity was closed in 2016, and 3.3 million tpy the previous year – our nitrogen webinar will explore these estimates further.

More globally, the commodity downturn that began in late-2014 has entered into its third year and global energy prices remain significantly below the levels seen prior to the major correction in oil prices.

Changes in nitrogen production costs in Q1 2017 were driven by the changing global energy landscape as follows:

  • The largest year-on-year increase in ammonia ex-works production costs per tonne was seen in North America. Typical ammonia ex-works costs for producers in the region rose by US$33 per tonne year-on-year to US$165 per tonne in December 2017, primarily due to an increase in the Henry-Hub- feedstock gas cost. The local gas benchmark rose by US$0.82/MMBtu.
  • Ukraine benefited from the diversification away from Russian gas imports towards competitively priced reverse gas imports from Europe to secure lower feedstock prices, improved further by a significant depreciation in the local currency. Ukrainian producers recorded a fall in ex-works costs of US$36 per tonne year-on-year in January 2017 to US$340 per tonne, while in UAH terms the cost was flat.

What have the other key developments in feedstock pricing been so far in 2017? And what does this mean for nitrogen pricing? Join our free nitrogen market webinar next week to hear the answers to these and other key questions facing the nitrogen industry.

Free webinar: Nitrogen Market – the evolving impact of energy

  • Free webinar: Analysing the latest market developments, the impact of energy, short and long term outlook
  • Register even if you can’t attend: We’ll send all registrants a link to the webinar recording – to watch when it suits you
  • Webinar date and duration: 27th April 2017, expected duration: 45 minutes

Register here >>

Related research from Integer

Nitrogen Cost and Profit Margin Service >>

  • Production costs by producer, the prices and margins they achieve and how these are likely to change in the future.
  • How feedstock costs, including shale gas, will impact production economics
  • Identify swing producers and where they are on the cost/supply curve
  • New capacity (greenfield and brownfield) likely to be added in the medium term


Nitrogen 10-Year Outlook Service >>

  • Reveal the 10 year forecasts of capacity additions, incorporating several scenarios
  • Discover the demand forecast for all of the primary nitrogen products, end products and end markets
  • Understand the role of the prominent importers and exporters by end product
  • Access the forecast casts for key importers, exporters and end users of the primary nitrogen products

For more information or if you have any questions please contact us:

Email: publications@integer-research.com
Tel: +44 20 7503 1265

About Integer Research
Integer Research is a specialist provider of research, data, analysis and consultancy services across a range of global industrial markets.