A M E R O P A - ASBA · Outlook (Supply): Nitrogen & Urea (N) Capacity in China 2000 -2021 Massive reduction of ammonia and urea capacity, ... Outlook (Supply & Demand): 2016 - 2021

A M E R O P A

– Fertilizers – presentation for ASBA Cargo Conference

in Miami FL

28 Sept 2017

Overview

What are Chemical (N P K) Fertilizers?

Fertilizer Market Outlook to 2021 (Supply and Demand)

Global Fertilizer Trade

Conclusion

Q & A

2 | Ameropa | Fertilizers


Fertilizers are materials of natural or synthetic origin that are applied to soils to provide nutrients essential to the growth of plants. Nutrients are taken out of the soil by the growing crops and need to be applied regularly.

Fertilizers are essential to meet worldwide food demand.

3 main macronutrients:

Nitrogen (N): growth and development of the plant

Phosphates (P): enhance photosynthesis process and development of plant roots and stems

Potash (K): increase plant’s resistance to crop disease and tolerance to drought, frost and salinity as well as seed maturation and fruit quality

Other secondary macronutrients (Calcium, Magnesium, Sulphur) and micronutrients (Copper, Iron, Zinc, Boron, Manganese, Nickel, etc.)

What are Fertilizers?


What are Fertilizers?

Physical forms: solid particles, fluids, and pressurized gas (anhydrous ammonia). Important is that fertilizers can be spread or applied evenly in the field.

Packing: in bulk or bags

Application: By spreading machines in developed agricultural markets and by hand in lesser developed agricultural markets

Season: Main fertilizer season is at the beginning of the spring season in each hemisphere when crops start to grow. Certain crops can also be planted during autumn season of each hemisphere. In some equatorial countries the application season for fertilizers is all year round.

Main crops: wheat, corn, rice, fruits and vegetables, oilseeds


Nitrogen Fertilizers are made from Ammonia. Ammonia (NH3) is produced by the Haber-Bosch process, an energy-intensive process with natural gas (or coal) supplying hydrogen and nitrogen deriving from the air.

Main Nitrogen Fertilizer Products: Urea (46% N), Ammonium Nitrate AN (34% N), liquid Urea-Ammonium Nitrate Solution UAN (32% N), Calcium Ammonium Nitrate CAN (27% N), Ammonium Sulphate AS (21% N)

What are Nitrogen Fertilizers?

Main Origins Main Destinations

Middle East India

China Latin America

FSU North America

North Africa Europe

S.E. Asia S.E. Asia

Urea – main Nitrogen fertilizer


Phosphate Fertilizers are obtained by extraction from minerals, mostly referred to as phosphate rock.

Main Phosphate Fertilizer Products: Diammonium Phosphate DAP (18-46-0), Monoammonium Phosphate MAP (11-52-0 or 11-50-0), Single Superphosphate SSP (18-22% P2O5), Triple Superphosphate TSP (44-48% P2O5), Various NPKs

What are Phosphate Fertilizers?


China Latin America

North Africa India / Pakistan

North America Europe

FSU North America

Middle East Australia

Dark DAP (Diammonium Phosphate)


Potash is a obtained by extraction of potassium minerals from the rock.

Main Potash Fertilizer Products: Potassium Chloride MOP (60-62% K2O), Potassium Sulfate SOP (48-52% K2O)

What are Potash Fertilizers?


Russia/Belarus China

Canada India

Israel Latin America

Germany North America

Spain Malaysia/Indonesia

Outlook (Supply): Nitrogen & Urea (N) Capacity in China 2000 -2021

Massive reduction of ammonia and urea capacity, but capacity in large plant segment still increasing….

Ammonia capacity static at 72 Mt NH3 from 2017 to 2021

20

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

+ 6 Mt

10

-6 Mt 0

S&M CL LRG CL LRG NG LRG OT

70 Mt N

60

50

40

30

90

80

70

60

50

40

30

20

10

0 200

0

200

1

200

2

200

3

200

4

200

5

200

6

200

7

200

8

200

9

201

0

201

1

201

2

201

3

201

4

201

5

201

6

201

7

201

8

201

9

202

0

202

1

Large S&M Segment Mt urea

Urea capacity : -6 Mt and +6 Mt = Flat at ar. 74 Mt from 2016

Sources: CICCC, CNFIA, IFA Production and International Trade, June 2017


Outlook (Supply): Urea (N) Capacity Developments to 2021

Urea : 55% of N production and 2/3 of

ammonia capacity

➢ 40 new units, of which 10 in China

➢ 2016-2021 : + 17 Mt (+8%)

➢ 226 Mt in 2021

➢ 90% in 2016-2018

➢ NA + EECA + EA + AF + LA

2015 2016 2017 2018 2019 2020 2021

+1.4 Mt in EECA

-1.0 Mt in China

But more than 10 Mt of

potential capacity in the

pipeline after 2021 :

India, Nepal, USA, Africa,

Russia, Uzbekistan,

Malaysia, Iran……..

-6.0 Mt of China capacity

+2.6 Mt in Africa

+1.1 Mt in West Asia

210 208

225 226 226

+4.2 Mt in USA

+3.0 Mt in India

+3.0 Mt in Nigeria

+2.7 Mt in East Asia

Other increases (EECA,

LA)

217

223

Mt urea

Source: IFA Production and International Trade, June 2017


Outlook (Supply): Phosphates (P) Capacity Developments to 2021

~25 new granulation units

Global PP capacity growing 16% from 96 Mt products in 2016 to 111 Mt in 2021

Mt Products

Morocco

9 Mt to 18 Mt

Saudi Arabia

3.5 Mt to 6 Mt

China

39 Mt to 42 Mt

Large planned expansions up to 2021

Plus a few on-going capacity projects



Outlook (Supply): Potash (K) Capacity Developments to 2021

Global Potash capacity growing 20% from 54.6 Mt K2O in 2016 to 65.5 Mt K2O in 2021

➢ Total Expansions: 12 Mt K2O

➢ Net Expansion : 11 Mt K2O

➢ Reduction in Europe

➢ 2/3 of increment in 2017-18

➢ New producers

➢ Turkmenistan 2017

➢ Russia 2018-20

Capacity 111.2 Mt products in 2021

Mt MOP eq

12.3 Mt MOPeq

NA 4.0

EECA 7.2

O

T

1.1

7.2 Mt MOPeq

EECA 6.0

OT 1.2

92



104,8 102,9 104,2 106,3 107,3 108,7 109,9 111,1 112,4

42,1 43,2 43,7 44,9 45,3 46,1 46,7 47,4 48,1

31,4 33,3 33,5 34,6 35,4 36,3 37,1 37,8 38,4

220

200

180

160

140

120

100

80

60

40

20

0

K20 P205 N

Outlook (Demand): Worldwide close to 200 Mt by 2021/22

Source: IFA Agriculture, May 2017

Evolution of Global Fertilizer Demand

Mt nutrients

Average Annual Change

Base Year 2021/22

N +1.2% p.a.

P2O5 +1.5% p.a.

K2O +2.1% p.a.

Total +1.5% p.a.

199 Base year 182


-1 0 1 2 3 4 5

Lat. Am. & Carib.

South Asia

East Asia

Africa

E. Eur. & C. Asia

North America

West Asia

Oceania

W. & C. Europe

N P2O5 K2O

Outlook (Demand): Lat.Am., Africa and E.Eur.&C.Asia Increasingly Influent

Anticipated Regional Volume Expansion by 2021/22 Anticipated Relative Regional Growth by 2021/22

Source: IFA Agric ulture, M ay 2017

Mt nutrients Source: IFA Agriculture, May 2017

0% 10% 20% 30% 40%

Africa

E. Eur. & C. Asia

Lat. Am. & Carib.

South Asia

West Asia

East Asia

Oceania

North America

W. & C. Europe


Outlook (Supply & Demand): 2016 - 2021

Nitrogen Mt N

Supply: +1.8% pa

Demand: +1.2% pa

Potential surplus rising up to 10 Mt N

154

160 163

166 167 167

146 148 150 152

154 156

166

130

140

150

160

170

2016 2017 2018 2019 2020 2021

P Acid Mt P2O5

Supply: +2.4% pa

Demand: +1.8% pa

Potential surplus nearly doubling

47 48

50 50 51 52

45 46 47

47 48 49

51

40

45

50

55

60

2016 2017 2018 2019 2020 2021

Potassium Mt K O 2

Supply: +3.8% pa

Demand: +2.2% pa

Potential surplus more than doubling

44 46

49 52 52

53

41 42 43

44 45 46

52

60

55

50

45

40

35

30 2016 2017 2018 2019 2020 2021

Sources: IFA Agriculture, IFA Production and International Trade, June 2017



Global Fertilizer Trade: Regional Nutrient Balances

in Million metric tons nutrient, 2016

2.7

-3.5

-1.0

10.4

-7.5

-1.6 -1.8

15.8

-1.3

5.8

2.1

-5.0

1.9

-6.0

3.3

-2.1

2.5

-0.5 -0.8

11.4

-5.5

3.2

-3.4

-7.9

0.2

11.8

-0.4

-10.0

-5.0

0.0

5.0

10.0

15.0

20.0

N

P

K

Africa

North America

Latin America

South Asia

East Europe/ Central Asia

Oceania

West Asia

East Asia West/

Central Europe


Global Fertilizer Trade: Flow Map


Global Fertilizer Trade in Relation to Production in 2016

In Mmt Ammonia Urea AS Nitrates UAN Phosphate Potash

Capacity* 217.7 220.3 30.6 92.1 37.0 80.0 110

Production* 181.3 177.8 24.6 62.1 21.4 65.4 64.5

Trade* 18.3 49.7 12.3 17.9 7.3 29.3 47.6

Seaborn** 36.4 21.3 29.8

Source: * IFA / ** Clarksons Research Aug-17


Global Fertilizer Trade: Seaborn (Dry Bulk)

Source: Clarksons Research, Aug-17 – Dry Bulk Trade Outlook, Volume 23., No. 8, August-2017

In Mmt 2014 2015 2016 exp.2017 Growth 16/17

Urea 38.5 39.2 36.4 39.5 8%

Phosphates 20.3 20.5 21.3 22.2 4%

Potash 34.5 31.7 29.8 33.2 12%

Sulphur 30.8 33.4 33.7 33.7 0%

Phosphate Rock 29.5 29.8 28.8 31.7 10%

Total Fertilizers 153.6 154.6 150.0 160.3 7%

For Comparison:

Total Minor Bulk trade in 2016: 1,864 Mmt and expected to grow 2% in 2017 to 1,899 Mmt

Total Major Bulk trade in 2016: 3,035 Mmt and expected to grow 5% in 2017 to 3,180 Mmt

(out of which Grains are 2016: 481 Mmt and expected to grow 6% in 2017 to 510 Mmt)


Conclusion

Seaborn Fertilizer Trade jump of 7% (10 Mmt) this year is exceptional

Supply driven Fertilizer Market with slower growth (av. 1.5%) towards 2021

Different Global Fertilizer trading pattern emerge due to:

- even more capacity coming on stream over next two years

- North America still a net importer on N Fertilizers but much less volume

- strategic aim of some countries to become self-sufficient (e.g. India)

- China may change from an exporter to a net importer on N Fertilizers

Traditional Trade Routes for Seaborn Fertilizers are changing


• Family owned Group successfully operating since 1948 from Switzerland • Main focus on global commodities trading, marketing and delivery

- 12 million tons p.a. Fertilizers and Chemicals - 15 million tons p.a. Grains, Oilseeds and Feedstuff

• Broad market presence (more than 100 locations in 30 countries)

• Robust auxiliary infrastructure in originating, storage and distribution • Equity participations in production + processing to support the Group’s trading

operations

• For more information, please visit our website at www.ameropa.com

Thank you for your attention!

AMEROPA: an Independent Trading House for Grains, Fertilizers and Chemicals

Documents

A M E R O P A - ASBA · Outlook (Supply): Nitrogen & Urea (N) Capacity in China 2000 -2021 Massive reduction of ammonia and urea capacity, ... Outlook (Supply & Demand): 2016 - 2021