Australian trio takes step closer to establishing low emissions ammonia bunkering operations
In February, Profercy reported:
“Acron is understood to have begun switching production from UAN to AN and urea primarily due to the poor returns from shipments to the US, as well as other markets. January UAN production is believed to have been below 100,000t, down from an average of 140,000t/month, with February production of UAN set to be below 60,000t. Profercy estimates that latest Nola and terminal values reflect below $90pt fob Baltic, a level that leaves little margin for the producer.”
The latest 9M 2020 results published by the producer last week offers the clearest indication to date of the extent of the switch away from UAN. Indeed, the impact of European anti-dumping tariffs on global trade flows and the response from US producers has kept UAN values low worldwide, particularly for Russian producers.
The latest results confirm that UAN production was down 30% or 391,000t year on year to 921,000t. The reduction allowed for extra feedstock and resource for the production of urea and AN.
Ammonium nitrate production increased by 198,000t or 12% YoY to 1.83m. tonnes. However, over the same period inhouse consumption declined by nearly half from 320,000t to 170,000t, meaning net merchant AN availability increased by 348,000t or 27% to 1.66m. tonnes.
The increased availability has not had a major impact on AN values this year as both export and domestic demand has been strong in 2020. January-September domestic AN demand increased by over 550,000t YoY to 3.58m. tonnes while exports of AN out of Russia increased by 165,000t to 2.46m. tonnes (January-August). The extra combined demand, at over 700,000t, is over double the increased availability from Acron.
For urea, total production declined by 59,000t to 887,000t. The decline in production is especially significant because in May 2020, Acron’s new granular urea facility in Veliky Novgorod with an annual nameplate capacity of 700,000t per year came on stream. Acron has been actively selling significant quantities of granular urea in Brazil and elsewhere, implying that its prilled urea units have faced the main production cuts. Prilled urea is used as feedstock for the production of UAN. Indeed, inhouse urea consumption declined by 157,000t to 391,000t which resulted in net merchant urea availability increasing by 98,000t or 25% to 496,000t despite the overall decline in urea production.
By Michael Samueli, Nitrogen Market Reporter
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