Investing in Nitrogen

Nitrogen is the largest single component of the Earth's atmosphere. It is combined with hydrogen to make ammonia.

Domestic Production and Use: Ammonia was produced by 12 companies at 24 plants in 16 States in the United States during 2010; 4 additional plants were idle for the entire year. Sixty percent of total U.S. ammonia production capacity was centered in Louisiana, Oklahoma, and Texas because of their large reserves of natural gas, the dominant domestic feedstock. In 2010, U.S. producers operated at about 85% of their rated capacity. The United States was one of the world’s leading producers and consumers of ammonia. Urea, ammonium nitrate, ammonium phosphates, nitric acid, and ammonium sulfate were the major derivatives of ammonia in the United States, in descending order of importance. Approximately 87% of apparent domestic ammonia consumption was for fertilizer use, including anhydrous ammonia for direct application, urea, ammonium nitrates, ammonium phosphates, and other nitrogen compounds. Ammonia also was used to produce plastics, synthetic fibers and resins, explosives, and numerous other chemical compounds.

Import Sources (2006–09): Trinidad and Tobago, 57%; Russia, 15%; Canada, 13%; Ukraine, 7%; and other, 8%.

Events, Trends, and Issues: The Henry Hub spot natural gas price ranged between $3.7 and $7.5 per million British thermal units for most of the year, with an average of around $4.5 per million British thermal units. Natural gas prices in 2010 were relatively stable; slightly higher prices were a result of increased demand for natural gas owing to colder temperatures. The average Gulf Coast ammonia price gradually increased from $275 per short ton at the beginning of 2010 to a high of around $420 per short ton in October. The average ammonia price for the year was estimated to be about $400 per short ton. The U.S. Department of Energy, Energy Information Administration, projected that Henry Hub natural gas spot prices would average $4.76 per million British thermal units in 2011. In Minnesota, researchers began work on a $4 million project that uses wind power to produce anhydrous ammonia. However, industry analysts estimate that it is unlikely that commercial use of renewable energy to produce fertilizer can compete in the global market unless fertilizer prices are twice the current price. Several companies have announced plans to build new ammonia plants in Argentina, Brazil, China, Cuba, Egypt, and India, which would add about 7.7 million tons of annual production capacity within the next 2 to 3 years. The largest growth in ammonia production is in China.

According to the U.S. Department of Agriculture, U.S. corn growers planted 35.6 million hectares of corn in the 2010 crop year (July 1, 2009, through June 30, 2010), which was 2% higher than the area planted in 2009. Favorable planting conditions occurred through early May, but below average temperatures and wet conditions dominated much of the Midwest and portions of the Plains in the middle part of May, hampering the planting of the remaining acreage. Corn plantings for the 2011 crop year, however, were expected to increase to 36.0 million hectares. Corn acreage was expected to remain high owing in part to continued U.S. ethanol production and U.S. corn exports in response to a strong global demand for feed grains. Nitrogen compounds also were an environmental concern. Overfertilization and the subsequent runoff of excess fertilizer may contribute to nitrogen accumulation in watersheds. Nitrogen in excess fertilizer runoff was suspected to be a cause of the hypoxic zone that arises in the Gulf of Mexico during the summer. Scientists continued to study the effects of fertilization on the Nation’s environmental health.

World Resources: The availability of nitrogen from the atmosphere for fixed nitrogen production is unlimited. Mineralized occurrences of sodium and potassium nitrates, found in the Atacama Desert of Chile, contribute minimally to global nitrogen supply.

Substitutes: Nitrogen is an essential plant nutrient that has no substitute. Also, there are no known practical substitutes for nitrogen explosives and blasting agents.

Nitrogen Producers
Achema Group - urea production plant in Jonava, Lithuania
Agrium (NYSE: AGU)
Air Liquide (EPA: AI) -
Air Products (NYSE: APD) -
Al-Jubail Fertilizer Co. - Al-Bayroni ammonia plant in Saudia Arabia
Azot Cherepovets - part of the PhosAgro Group
CF Industries (NYSE: CF)
Coromandel International
Egyptian Chemical Industries - Aswan nitrogen fertilizer production line
Egyptian Nitrogen Products - Misr Oil Processing Co (MOPCO) nitrogen facility in Damietta, Egpyt
Engro Chemical Pakistan - ammonia and prilled urea plant in Dharki, Sindh Province, Pakistan
Fatima Fertilizer Co. - Joint venture between Fatima Group and Pakistan's Arif Habib Group. Urea and calcium ammonium nitrate plant at Sadiquabad, Rahim Yar Khan District, Punjab, Pakistan.
Fertilisers and Chemicals Travancore - urea plant in India
Haldor Topsoe A/S - ammonia synthesis technology
Hangfeng Evergreen - Polymer-coated urea production line
Indian Farmers Fertilizer Cooperative (IFFCO) - MOU with Qafco to establish an ammonia and urea complex in Qatar
Koch Nitrogen
Krishak Bharati Cooperative - two ammonia plants in Hazari, Surat, India
Libyan Norwegian Fertilizer Co (Lifeco) - Marsa El Brega fertilizer assets
Linde AG (ETR: LIN)
LSB INdustries
Magellan Midstream Partners
Mosaic (NYSE: MOS)
National Oxygen (BOM: 507813) - Indian supplier of industrial gases including nitrogen, oxygen, and argon.
Nitrofert JSC - ammonia and urea production in Estonia
Notore Chemical Industires - ammonia and urea production plant in Onne, Rivers State, Nigeria
NuStar Energy - Gulf Central ammonia pipeline
OAO Acron - Russian nitrogen fertilizer producer
Perdaman Chemicals and Fertilisers - $2.8 billion urea manufacturing facility in Collie, Australia
Petroleo Brasiliero (NYSE: PBR) - Ammonia and urea plant at Tres Lagoas in Mat Gross do Sul, Brazil
Petroquimica de Venezuela (Pequiven) - urea plants in Jose and Puerto Nutrias, Venezuela
Praxair (NYSE: PX)
Qatar Fertilizer Co. (Qafco) - urea plants at Mesaieed site in eastern Qatar
Ruwais Fertilizer Industires (Fertil) - ammonea-urea plant at Ruwais, United Arab Emirates
Sable Chemicals Industires - nitrogen fertilizer plant in Kwekwe, Zimbabwe
Sichuan Hongda - ammonia, urea, and compound fertilizer plants via its Sichuan Mianzhu Chuanrun Chemical subsidiary
Sohar International Urea and Chemical Industries (SIUCI) - subsidiary of Suhail Bahwan Group, urea and ammonia plant at the Sohar Industrial Port northwest of Muscat, Oman
Sorfert Algerie - Joint venture between Orascom Construction Industries and Sonatrach
Southeast Idaho Energy
Stamicarbon B.V. - urea melt and granulation technology
Tampa Pipeline Corp.
Terra Nitrogen (NYSE: TNH) -
Uzbek Chemical Industry - industrial ammonia and carbamide complex
Yara International ASA - ammonia and urea production at its Le Havre plant in France.

Nitrogen News
2011-09-07 - (bl) - BASF said to be close to selling most fertilizer assets to Yara of Norway
2011-07-26 - (bw) - Air Liquide completes new nitrogen plant with smaller carbon footprint
2011-07-10 - (tri) - Urea shortage threatens agricultural sector's growth
2011-07-09 - (mn) - Chemist receives fulbright to advance nitrogen research
2011-07-05 - (gw) - Qatargas and Gasal sign deal for pipeline supply of nitrogen
2011-06-25 - (hnd) - TEPCO plans dangerous liquid nitrogen injections at Fukuskima reactor 2
2011-06-24 - (mw) - CF Industries resumes production at Port Neal nitrogen complex
2011-06-17 - (rh) - FAMA considering selling nitrogen and phosphorus credits
2011-06-15 - (ag) - Nitrogen prices to approach 2008's record high
2011-06-14 - (fwi) - Nitrogen fertiliser price set for another hike
2011-06-12 - (msn) - Terra Nitrogen's dividen is safe
2011-06-08 - (ap) - Air Products to expand nitrogen capacity and pipeline in Chandler, Arizona

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