Brazil aims to cut fertilizer imports by quarter

Spanish Market: Agriculture, Fertilizers
24/02/22

Farming powerhouse Brazil is launching a national fertilizer plan to reduce its dependency on imports by more than a quarter to nearly 60pc of national consumption by 2050.

The plan, which would reduce imports from their current 85pc of consumption, will be officially released after the signing of a presidential decree. In March 2021, Brazil, a leading producer of soybeans, corn, cotton and coffee, undertook the crafting of a national fertilizer strategy to consider ways of boosting fertilizer output to make the country less dependent on imports.

Discussions led to a 195-page technical document that was made available to Argus and will be the basis for the governmental decree.

Among the plan's goals, Brazil intends to increase nitrogen installed capacity gradually up to 2.8mn metric tonnes (t) by 2050. To reach that volume, the plan includes attracting at least two more nitrogen producers in Brazil through 2030 and another four through 2050. As for private investments, the government seeks to attract at least $10bn to increase nitrogen production — and output of raw materials — by 2030 and the same amount each decade by 2050.

In 2020, Brazil produced 224,000t of nitrogen fertilizers, according to the document, an amount that could meet 4.3pc of the country´s demand in the same year. Operating at full installed capacity, local production could meet 17.6pc of consumption. The document highlights that demand for nitrogen fertilizer may double by 2050.

Brazil currently has three operational nitrogen units. Leased from Petrobras, Unigel's Camacari unit, in Bahia state, has an installed capacity of 475,000t/yr of ammonia and another 475,000t/yr of urea. Unigel's Laranjeiras unit, in Sergipe state, has an installed capacity of 650,000t/yr of urea, 450,000t/yr of ammonia and 320,000t/yr of ammonium sulphate. Yara has an installed capacity of 211,000t/yr of ammonia and another 416,000t/yr of ammonium nitrate.

Investment costs in producing plants as well as operating and raw material costs are determinants for competitiveness of Brazilian fertilizer. Natural gas is the main source of energy for producing nitrogen fertilizer in Brazil and prices for the raw material are a major factor in enabling local production of ammonia and urea.

Brazil is still in the early stages of a natural gas market opening, and the development of this market is essential for the local fertilizer industry. New players in the natural gas segment are expected to add competitiveness and liquidity to new contracts. Brazil also intends to enable bilateral agreements with its neighbors, Bolivia and Argentina, by 2025 to access natural gas from these countries.

While with nitrogen the goal is based on ways to boost Brazilian access to the raw material, regarding phosphates and potash, Brazil is focused on mapping out mining possibilities. One of the goals is to increase phosphate rock exploration by 3pc each year through 2030 and by 2pc each year until 2050. Gradually, Brazil intends to enhance its phosphate rock production to reach 27mn t/yr. The plan also envisions the addition of other two phosphate fertilizer and raw materials producers in new mining areas by 2030, totaling seven producers and increasing that number to 10 by 2040.

On potash, Brazil aims to raise national production gradually through 2050 to 6mn t of installed capacity. To reach that volume, the goal is to double to 10 the amount of potash and raw materials producers by 2030, adding another 10 producers by 2040. Brazil has only one potash producing unit, in Sergipe state, owned by Mosaic Fertilizantes and whose production reached around 9.5mn t in 2020. The main potash deposits with exploration potential mapped so far are located in Sergipe and Amazonas states and account for around 3pc of global deposits.

Steps to reach goals

To increase production and installed capacity, Brazil's government aims to encourage international investments by enabling financial incentives and reducing redtape.

Supported by the ministry of foreign affairs, Brazil intends to discuss at the Organization for Economic Co-operation and Development (OECD) ways of attracting international and national investors to the fertilizer market. The discussions will be valuable in encouraging bilateral agreements with leading global producing markets, such as Belarus, Canada, China, Morocco and Russia, among others.

A Brazilian government source told Argus the government has already taken a series of moves envisaged by the plan. Last week, agriculture minister TerezaCristina Correa da Costa paid a visit to Iran, where delegates of Brazilian and Iranian companies signed an agreement to barter 400,000t of Iranian urea for the same volume of Brazilian soybeans and corn.

All projects to develop and increase fertilizer production require long-term planning and investments in infrastructure. To encourage that, the plan includes a proposal to craft a law by 2025 to add special incentive norms for the development of fertilizer industry infrastructure.

By 2030, the government wants to enable at least five auctions of mining areas for phosphate fertilizers and another five auctions for areas of potassium fertilizers.

By Renata Cardarelli and Flavia Bohone

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03/10/24

Indonesia’s Ni expansion via HPAL could face challenges

Singapore, 3 October (Argus) — Indonesia is expected to continue expanding its nickel production in the coming years, especially through increasing its high-pressure acid-leaching (HPAL) capacity, but the lack of readily available sulphuric acid and proper management of the tailings waste could pose challenges to this plan. Production is expected to rise despite an anticipated surplus in the supply of nickel in the market. Sulphuric acid is used in the HPAL process to separate nickel and cobalt from nickel ore to produce mixed hydroxide precipitate (MHP), which is the feedstock for the downstream processing of nickel sulphate, cathode and battery. Indonesia is expected to produce 325,000-345,000t of MHP this year, up from around 269,000t of in 2023, according to market sources. But with several MHP projects planned to come online in the next few years, MHP output for the next three years is projected to treble to 800,000-900,000t, according to the country's deputy minister for the co-ordinating ministry for maritime and investment affairs Septian Hario Seto on 2 October at a metal event in London. As this would require a lot more nickel ore and sulphuric acid, there are concerns that the availability of limonite ore could deplete as fast as the saprolite ore supply, which is mainly used for nickel pig iron and matte production. There were also discussions that the Indonesian government will convene with nickel market participants to discuss about the supply situation of limonite ore. There are currently four HPAL facilities operating in Indonesia. This includes Huayou's Huayue and Huafei projects , GEM's QMB project and Lygend's HPAL project. Others were also concerned that the availability of sulphuric acid could be a limiting factor to Indonesia's rapid expansion of HPAL production, as sulphuric acid demand from Indonesian HPAL projects is expected to reach 7.12mn t in 2025, almost 40pc increase from this year's demand at 5.17mn t, according to Argus estimates. Indonesia has been importing sulphuric acid from mainly China and South Korea to meet the growing demand for its production units at Obi Island and Sulawesi. But a ramp-up in sulphur-burning operations has pushed several MHP producers like Halmahera Persada Lygend to switch to buying lower-cost sulphur instead. For most sulphur burners, 1t of sulphur produces around 3t of sulphuric acid. The startup of Freeport McMoran's Manyar smelter in Java integrated industrial and port estate in East Java's Gresik, coupled with mining firm Amman Mineral Nusa Tenggara's (AMNT) copper smelter in the West Sumbawa regency of Nusa Tenggara province, is also expected to alleviate some supply concerns, with the two expected to add at least 3mn t/yr of acid capacity by the end of 2025. Proper disposal of tailings waste could pose another challenge to Indonesia's planned HPAL expansion, particularly with increasing scrutiny on the environmental, social and governance (ESG) standards by Indonesia's mining industry. The HPAL process generates a large volume of tailings, with energy consultancy Wood Mackenzie estimating an output of 1.4-1.6t of waste from every 1t of nickel produced through HPAL. There are three common ways to dispose tailings waste – tailings dam, deep sea tailings and dry stacking. Dry stacking is more widely used because it is considered as the more sustainable option. But dry stacking also comes with its own environmental and biodiversity risks, as Indonesia's seasonal wet weather and seismic activity of the site could be a problem for waste storage. To ensure a smooth expansion in HPAL production, it is crucial for Indonesia to find ways to secure the necessary sulphuric acid supplies and to adopt appropriate methods for tailings waste disposal. By Sheih Li Wong and Deon Ngee Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Offers total 2.57mn t of urea in RCF tender: Update 2

03/10/24

Offers total 2.57mn t of urea in RCF tender: Update 2

Adds table of offers Amsterdam, 3 October (Argus) — Indian fertiliser importer RCF closed its tender to buy urea today, with 21 suppliers offering a total of 2.57mn t across both coasts. There were 20 offers for the east coast for a total of 1.37mn t and 17 for the west coast for 1.2mn t. Trading firms Agricommodities/ETG and Midgulf offered the largest quantities, submitting 150,000t each for both coasts ( see table below ). The quantities offered include the usual double- and triple-counting of volumes available to trading firms. There were 22 valid offers totalling 3.87mn t under the previous Indian tender on 29 August, which eventually saw just 1.13mn t bought. Most expectations before the tender's close had been for prices around the $370s/t cfr west coast and above, having risen higher over the week as tensions in the Middle East roiled the urea market. Prices offered will emerge in the coming days. RCF requested offer validity until 14 October and cargoes to ship from load ports by 20 November. By Harry Minihan RCF 3 October urea tender quantities t Supplier East coast West coast Total Agricommodities/ETG 150,000 150,000 300,000 Midgulf 150,000 150,000 300,000 Dreymoor 50,000 50,000 100,000 Sun International 50,000 0 50,000 Samsung 76,500 76,500 153,000 Sabic 100,000 100,000 200,000 Fertistream 47,500 0 47,500 Medallion 50,000 50,000 100,000 Ameropa 52,400 52,400 104,800 Agrifields 40,000 0 40,000 Fertiglobe 45,000 45,000 90,000 Indagro 45,000 45,000 90,000 Alkagesta 45,000 45,000 90,000 Koch 47,500 47,500 95,000 Macrosource 45,000 45,000 90,000 Aditya Birla 100,000 100,000 200,000 Continental 100,000 100,000 200,000 Liven 30,000 50,000 80,000 OQ 100,000 0 100,000 Hexagon 50,000 50,000 100,000 Keytrade 0 40,000 40,000 Total 1,373,900 1,196,400 2,570,300 Market sources - subject to confirmation Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Australia’s Origin to exit Hunter Valley Hydrogen Hub

03/10/24

Australia’s Origin to exit Hunter Valley Hydrogen Hub

Sydney, 3 October (Argus) — Australian utility and upstream firm Origin Energy has decided not to proceed with its planned hydrogen development project, the Hunter Valley Hydrogen Hub (HVHH), in Australia's New South Wales. The decision to withdraw from the proposed 55MW HVHH and halt all hydrogen opportunities was made because of continuing uncertainty about the pace and timing of hydrogen market development, Origin said. The firm said the capital-intensive project, intended to progressively replace gas as a feedstock in a nearby ammonia manufacturing plant, carried substantial risks. Origin Energy had an initial agreement with Australian chemicals and explosives company Orica to take 80pc of the green hydrogen produced from the hub for Orica's 360,000 t/yr ammonia facility on Kooragang Island, near the city of Newcastle. Origin Energy and Orica in 2022 said they will study plans to develop the HHVH in Hunter Valley region of NSW, which is Australia's largest thermal coal-producing area. "It has become clear that the hydrogen market is developing more slowly than anticipated, and there remain risks and both input cost and technology advancements to overcome. The combination of these factors mean we are unable to see a current pathway to take a final investment decision on the project," said chief executive Frank Calabria on 3 October. Origin had planned to make a final investment decision on the project by late 2024. The hub, which was estimated to cost A$207.6mn ($143mn), had been allocated A$115mn in state and federal funding and was shortlisted for production credits under Canberra's Hydrogen Headstart programme. In July, Origin described the pace of development in the hydrogen industry as "slower than it had anticipated 12 months ago", said. The company expressed hopes that improved electrolysis efficiency would reduce the rising costs of production. The decision is a significant setback for Australia's green hydrogen ambitions, following the July decision by Australian miner and energy company Fortescue to postpone its target of 15mn t/yr green hydrogen output by 2030. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

California adds oilseed limits as vote nears: Update

02/10/24

California adds oilseed limits as vote nears: Update

Updates throughout with more detail on revisions. Houston, 2 October (Argus) — California regulators advanced stricter limits on crop-based biofuels as revisions to a key North American low-carbon incentive program drew closer to a vote. The California Air Resources Board (CARB) late yesterday added sunflower oil — a feedstock with no current approved users or previous indicated use in the program — to restrictions first proposed in August on canola and soybean oil feedstocks for biomass-based diesel. The new language maintained a proposal to make the program's annual targets 9pc tougher in 2025 and to achieve by 2030 a 30pc reduction from 2010 transportation fuel carbon intensity levels. Board decisions that could come as early as 8 November may reconfigure the flow of low-carbon fuels across North America. The state credits anchor a bouquet of incentives that have driven the rapid buildout of renewable diesel capacity and dairy biogas capture systems far beyond California's borders, and inspired similar, but separate, programs along the US west coast and in Canada. CARB staff's latest proposals, published a little before midnight ET on 1 October, offer comparatively minor adjustments to the shock August revisions that spurred a nearly $20 after-hours rally in LCFS prompt prices. Prompt credits early in Wednesday's session traded higher by $3 than they closed the previous trading day before slipping back by midday. LCFS programs require yearly reductions in transportation fuel carbon intensity. Higher-carbon fuels that exceed these annual limits incur deficits that suppliers must offset with credits generated from the distribution to the market of approved, lower-carbon alternatives. California's program has helped spur a rush of new US renewable diesel production capacity, swamping west coast fuel markets and inundating the state's LCFS program with compliance credits. CARB reported more than 26mn metric tonnes of credits on hand by April this year — more than enough to satisfy all new deficits generated in 2023. Staff have sought through this year's rulemaking to restore incentives to more deeply decarbonize state transportation than thought possible during revisions last made in 2019. Participants have generally supported tougher targets, with some fuel suppliers warning about potential price increases and credit generators urging CARB to take a still more aggressive approach. But proposals to limit credit generation to only 20pc of the volume of fuel a supplier made from canola, soybean and now sunflower has found little public support. Environmental opponents have argued that the CARB proposals fall short of what is necessary to add protections against cropland expansion and fuel competition with food supply. Agribusiness and some fuel producers have warned the concept, proposed in August, ran counter to the premise of a neutral, carbon-focused program and against staff's own view last spring. The proposal exceeded what CARB could do without beginning a new rulemaking, some argued. CARB yesterday proposed a grace period for facilities already using the feedstocks to continue generating credits while seeking alternatives. Facilities certified to use those feedstocks before changes are formally adopted could continue using those sources until 2028, compared to a 2026 cut off proposed in August. No facilities currently supplying California have certified sunflower feedstock, and it was not clear that any were planned. "We're not aware of any proposed pathway or lifecycle analysis for sunflower oil, so that addition is just baffling," said Cory-Ann Wind, Clean Fuels Alliance America director of state regulatory affairs. "Clearly not based in science." The latest revisions include a change to how staff communicate a new, proposed automatic adjustment mechanism (AAM). The mechanism would automatically advance to tougher, future targets when credits exceed deficits by a certain amount. Supporters consider this a more responsive approach to market conditions than the years of rulemaking effort already underway. Opponents argue such a mechanism cedes important authority and responsibility from the board. Staff proposed quarterly, rather than annual, updates on whether conditions would trigger an adjustment, and to use conditions during the most recent four quarters, rather than by calendar year. Obligations and targets would continue to work on a calendar-year basis. CARB staff clarified that verifying electric vehicle charging credits would not require site visits to the thousands of charging stations eligible to participate in the program. Staff also clarified how long dairy or swine biogas harvesting projects could continue to generate credits if built this decade, with a proposed reduction in credit periods only applying to projects certified after the new rules were adopted. California formally began this rulemaking process in early January after publishing draft proposals in late December. Regulators initially proposed adjusting 2025 targets lower by 5pc for 2025 — a one-time decrease called a stepdown — to work toward a 30pc reduction target for 2030. CARB set its sights on 21 March for adoption. But staff pulled that proposal in February as hundreds of comments in response poured in. Updated language released on 12 August proposed a steeper stepdown for 2025 of 9pc while keeping the 30pc target for 2030. Public comment on yesterday's publication will continue to 16 October. By Elliott Blackburn Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Tampa molten sulphur price rises for 4Q

02/10/24

Tampa molten sulphur price rises for 4Q

Houston, 2 October (Argus) — Fertilizer producers Mosaic and Nutrien have settled the fourth quarter molten sulphur price with their suppliers at $116/long tonne (lt) delivered. The new settlement marks an increase of $40/lt from the third quarter price of $76/lt del, and follows the trend of firming sulphur markets during the third quarter amid resilient global fertilizer demand. Despite an active hurricane season in the US Gulf coast, disruptions to output have remained short-lived. But damage from Hurricane Helene last month has caused significant disruption to fertilizer production in the southeast US, with operations at two Florida-based phosphate fertilizer production facilities hampered. Mosaic's Riverview, Florida, facility is expected to return to normal capacity during the first half of October following water mitigation and site cleanup. Damage at Nutrien's White Springs, Florida, plant is still being assessed, with no clear timeline of when it will resume normal operations. Global solid sulphur contracts are beginning to settle for supply delivered during the fourth quarter at corresponding rises, with Middle East contracts rising by $39-43/t from the previous quarter to reach $110-122/t fob for Middle East for tonnes delivered to end users and traders. Additionally, delivered quantities for the north African market have been discussed in a range of mid-$130s to high $140s/t cfr depending on destination and cargo size for granular product from the FSU and the Middle East, though final confirmations remain outstanding. Crushed lump sulphur is expected to be priced below granular sulphur at the low end of the range. Some contract supply routes have not as yet been confirmed as having been finalized. By Chris Mullins and Maria Mosquera Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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