0
Home
News
Directory
E-newsletter
Magazine
Events
Data
AgReport
Subscribe
U.S. nitrogen fertilizer production set for takeoff
Nov. 2, 2015
The U.S. nitrogen fertilizer market stands at the cusp of transformative growth, as domestic producers are set to boost production in response to lower natural gas prices.
The reversal ends a steep, two-decade contraction in U.S. production during which three-quarters of all domestic plants closed and cheaper imports flooded into the U.S. to take their place and dominate the market.
The reversal ends a steep, two-decade contraction in U.S. production during which three-quarters of all domestic plants closed and cheaper imports flooded into the U.S. to take their place and dominate the market.
The newly issued report, "The Evolving U.S. Nitrogen Landscape," describes how U.S. demand for nitrogen has remained steady at about 20 million tons per year since the mid-1990s. While demand is expected to remain flat, the U.S.'s current low natural gas prices have reinvigorated the domestic nitrogen fertilizer industry. As a result, virtually all of the major U.S. players are contemplating fertilizer plant expansions or, in some cases, new greenfield projects. No new nitrogen fertilizer plant has been built in the U.S. during the past 15 years.
By 2019, global production of nitrogen is anticipated to expand around 9 percent while total global nitrogen demand will increase 3 percent. This growing imbalance between demand and supply will likely strain global competitors because of higher foreign natural gas prices and shipping costs. U.S. operations will continue to be among the lowest cost producers.
"The landscape of domestic nitrogen production is changing, and a substantial amount of new domestic ammonia capacity will be coming online during the next 2-3 years," said Luke Brummel, CoBank's industry analyst, the report's author. "Moving forward, we'll see structural changes occurring in the domestic nitrogen industry, including compressed margins, more consolidation, higher barriers of entry, and new risk management strategies on the part of manufacturers and distributors."
Source: Ag Professional
More from AgroNews
Change
Hot TopicSubscribe
| Subscribe Email: | * | |
| Name: | ||
| Mobile Number: | ||
Comment
0/1200
NEWSLETTER