global nitrogen fertilizer demand and supply: trend, current...
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Global Nitrogen FertilizerDemand and Supply: Trend,Current Level and Outlook
Patrick Heffer and Michel Prud’hommeInternational Fertilizer Association
7th International Nitrogen Initiative Conference, 4-8 December 2016, Melbourne, Australia
GLOBAL NITROGEN FERTILIZER DEMAND
Evolution of Global Fertilizer Consumption by Nutrient(Tg N+P2O5+K2O)
0
20
40
60
80
100
120
140
160
180
200K2O P2O5 N
Source: IFA, 2016
Global demand: +33% since2000, to 182 Tg in 2013-8% in 2008/09 owing toeconomic downturn… but -2% only for NNutrient trend since 2000:o N: +35%, to 110 Tgo P2O5: +26%, to 41 Tgo K2O: +39%, to 31 Tg
Economicdownturn
Evolution of Regional N Fertilizer Consumption by Region (Tg N)
0
20
40
60
80
100
120Oceania
West Asia
Africa
E Europe & C Asia
Latin America
W & C Europe
North America
South Asia
East Asia
Source: IFA, 2016
Developing countries = 83% ofthe global increaseEast Asia (+13 Tg) & South Asia(+7 Tg) = 70% of the globalexpansionFastest growth in EECA (+84%)SSA expands quickly since 2008W&C Europe: Only contractingregion
Country Breakdown of Global N Fertilizer Consumption in 2013/14
31%
15%
11%3%3%
3%2%
2%
30%
China
India
United States
Brazil
Pakistan
Indonesia
Canada
France
ROW
Source: IFA, 2016
China (34 Tg)India (17 Tg)USA (12 Tg)Top-3 countries = 57% marketshareNext 5 markets (2-4 Tg each)= 13% shareTop-8 = 70% share
Breakdown by Product of Global N Fertilizer Demand in 2013/14
4% 3%
57%6
3%
5%
5%
8%
2% 0%7%
Ammonia dir. applic.
Ammonium sulphate
Urea
Ammonium nitrate
Calc.amm. nitrate
Nitrogen solutions
Other N straight
Ammonium phosphate (N)
Other NP (N)
N K compound (N)
N P K compound (N)
Source: IFA, 2016
N market dominated by ureao Fast increasing urea
market: +54% since 2000o Urea’s share rose from 49%
in 2000 to 57% in 2013Ammonium phosphates: 2nd
fastest growing N market:o +80% since 2000o 8% of current global N uses
Relative Contribution of the Main Crop Categories to Total N FertilizerConsumption in 2010/11 in the Main Fertilizer Markets
China
India
USA
EU-27
Brazil
WorldWheatRiceMaizeOther CerealsSoybeanOil PalmOther OilseedsFibre CropsSugar CropsRoots/TubersFruitsVegetablesOther Crops
Source: Heffer, 2013
Cereals = 55% of global Nfertilizer uses (58 Tg N)Rice, wheat, maize: 15-18% eachFruits & vegetables: 15%Oil crops: 7%Fibre crops, sugar crops, roots &tubers: 3-4% eachHuge country diversityo Maize: ~50% in the USAo Fuits & veg: >30% in China
Typical Evolution of N Use Efficiency (NUE) Over Time
Different countries are on different points on the curve
Sub-Saharan Africa
Brazil
DevelopedCountries
ChinaIndia
N Market Share in 2015/16Deved countries 26%China 29%India 14%Brazil 7%SSA 2%ROW 22%
NUE =N output
----------------------Sum of N inputs
Fertilizer-N+ Manure-N recycled+ Crop BNF+ Atmospheric deposition+ (irrigation, biosolids…)
Crop Yield
100%
Adapted from Zhang et al., 2015
Global NUE = 42-47% (Lassalettaet al., Zhang et al.)Largely influenced by crop mix,management practices, policyComplementary indicators needed
5-Year Outlook for World and Regional N Fertilizer Demand
Source: Heffer and Prud’homme, 2016
0 5 10 15 20 25 30 35 40 45
Oceania
West Asia
Africa
E. Eur. & C. Asia
W. & C. Europe
Lat. Am. & Carib.
North America
South Asia
East Asia
Av. 2013/14 to 2015/16Variation in 2020/21
Global N demand seen up 1.2%per year, to 117 Tg by 2020P and K demand grow faster(1.7% and 2.3% per year);reflects improving NUE andN:P:K balanceGrowth driven by 3 regions: 74%share of the anticipated growthNo growth in China half ofworld market is “mature”Africa, Latin America and EECAseen expanding faster
19%19%
Top-3 = 74%Top-3 = 74%19%19%
35%35%
Projections to 2030 for Global N Fertilizer Demand (Tg N)Under Three Different Economic Growth Scenarios
101115 124
3
83
6
0
20
40
60
80
100
120
140
2010 2020 2030
Fast, 6% per year
Base, 4% per year
Slow, 2% per year
Real
Source: Integer and LMC, 2013
Harvested area: +185 mill habetween 2010 and 2030(mostly grains and oilseeds)Projected increase in applicationrates, moderated by NUE gainsN demand: +1.3%/year, to 132Tg by 2030 (range 124-138 Tg)vs. +1.9% for P and +3.3% for KChina and India to play lessprominent roleCereals and fruits/veg drivedemand expansion
Crop-based projections
GLOBAL NITROGEN FERTILIZER SUPPLY
World Ammonia Capacity (Tg Ammonia-N)
-
20
40
60
80
100
120
140
160
180
200 OtherCoal ChinaCoal ROWNatural gas
Source: Prud’homme, 2016
Ammonia: the raw material for mostN fertilizersAccess to abundant, affordableenergy supply is criticalo Natural gas: 72% of the global
ammonia feedstock; bulk offuture growth
o Coal: 26% of the feedstockOutlook: Global capacity seen up 9%bw 2015 and 2020, to 189 Tg No in Africa, West Asia, North
America, EECAo mostly from natural gas
China Ammonia Production Capacity (Tg N)
-5
101520253035404550556065 Natural gas
Coal
Source: Prud’homme, 2016
Recent consolidation of theChinese N fertilizer industryChina currently accounts for95% of global coal-basedammonia capacityCoal-based ammonia ~82%of total Chinese ammoniacapacity in 2016Share of coal seen stablebetween 2016 and 2020
Global Energy Use Efficiency in Ammonia ProductionResults of the 2012 IFA Benchmarking Survey
Source: IFA, 2014
Fertilizer production uses ~1.2%of world’s total energyOf which ~90% is used forammoniaLarge gains in energy efficiency(adoption of advancedtechnologies)New plants performing close tomaximum efficiency
World Ammonia Production by Region (Tg N)
0
20
40
60
80
100
120
140 Oceania
East Asia
South Asia
West Asia
Africa
Latin America
North America
E. Europe & C. Asia
Central Europe
West Europe
Source: IFA, 2016
Heavy investments in newcapacity following 2007/08Global ammonia production:+29% bw 2003 and 2013, to 140Tg NStrongest growth in East Asia:+51%, +18 TgRapid expansion in West Asia:+120%, +7 Tg
World Urea Supply (Tg N)
0 2 4 6 8
10 12 14 16 18 20 22
2003
2005
2007
2009
2011
2013
Oceania East Asia South Asia West Asia Africa Latin America North America E. Europe & C. Asia Central Europe West Europe
0 2 4 6 8
10 12 14 16 18 20 22
2003
2005
2007
2009
2011
2013
Source: IFA, 2016
World urea production: +46% bw 2003and 2013, to 78 Tg N; Bulk of theincrease in East Asia and West AsiaGlobal urea trade: +55%, to 21 Tg N in2013Export growth largely captured byWest Asia; export growth also in EastAsia (China’s shift from net importer tonet exporter)South Asia accounts for most of theglobal import expansionOutlook: Global capacity seen up 10%bw 2015 and 2020, to 109 Tg N(mostly Africa, North America, EECA)
World Exports World Imports
Projected Evolution of Regional N Balances (Tg N)
-9
-6
-3
0
3
6
9
12
15
18
2014 2019
Thou
sand
s
EECA
West Asia
Africa
Central Europe
Latin America
East Asia
Oceania
North America
West Europe
South Asia
Source: FAO, 2016
Faster growth of industrial uses vs.fertilizer uses of ammonia and ureaPotential supply seen rising fasterthan demandWorld potential N surplus projectedto grow from 10 to 15 Tg N bw 2014and 2019Potential surpluses seen to furtherincrease in EECA, West Asia, AfricaPotential deficit forecast to furtherexpand in South AsiaPotential deficit in North Americawould sharply decline
IN SUMMARY
Key Take Home Messages
FERTILIZER SUPPLYFollowing 2007/08, heavy industry invest-ments in new ammonia and urea capacityto secure supply for the coming decadeInvestments in countries with abundantaccess to natural gas reserves, and inlarge fertilizer-consuming countriesSouth Asia, especially India, to remain themain importing marketEECA and West Asia to strengthen theirposition as leading net exporters
FERTILIZER DEMANDWorld N fertilizer demand projectedto steadily increase, at least until 2030N demand growth rate seen slowingdown vs. historical trend (reflectingNUE gains)Declining weight of Asia, andincreasing contribution of LatinAmerica and AfricaIndustrial N uses growing faster thanN fertilizer demand
SALES2014 value of sales
from fertilizer producers:US$172 bill
Of which sales valueof US$84 bill forstraight N fertilizers,US$25 bill forMAP/DAP and US$26bill for NPKs
EMPLOYMENT
926,000 jobs inproduction around the world
N sector directlyemploying 482,000 workers+ 31,000 for MAP/DAP and112,000 for NPKs
Fertilizer industryresponsible 2.3 mill jobsdirectly and indirectly
INVESTMENT
Industry to investUS$83 bill in revampsand expansions in 2015-2019
Anticipated investmentsof US$43 bill in straight Nfertilizer capacities, US$3bill in MAP/DAP andUS$2 bill in NPKs
Source: Integer Research for FA, 2016
The Global Fertilizer Industry at a GlanceMacro-Economic Indicators
