High nitrogen prices have sure encouraged producers to lift their ambitions.
Ahead of the Ukraine war – which supercharged rises in fertilizer prices, as it boosted European prices of key raw material natural gas, and overshadowed Black Sea exports – manufacturers were planning 10.8m tonnes in additional production capacity over 2022 to 2024.
Now that total has risen to 12.8m tonnes, with India and Russia leading the charge.
Whether all that will be achieved is a different matter. Large projects in fertilizer, as in other sectors, have a habit of being delayed. It looks like 2022 ambitions, for instance, peaked in May.
Rally to prove short-lived
It also looks like producers haven’t got that much confidence in the price boom lasting too long.
The 2.0m tonnes of expansion planned for 2024 is in fact below the 3.2m tonnes needed to meet annual consumption growth.
And Cru’s estimate for 2025 is actually of net contraction in global nitrogen capacity, of 100,000 tonnes, for the first time in years.
| Global nitrogen makers’ capacity additions, planned and achieved | |||||||||
| Forecast date |
2024 additions |
2023 additions | 2022 additions | 2021 additions |
2020 additions | ||||
| August 2022 | 2.0 | 5.6 | 5.2 | 4.7 | 1.0 | ||||
| May 2022 | 2.0 | 5.0 | 5.7 | 4.7 | 1.0 | ||||
| February 2022 | 1.4 | 4.3 | 5.1 | 4.7 | 1.0 | ||||
| November 2021 | 2.1 | 3.4 | 5.5 | 4.7 | 1.0 | ||||
| August 2021 | 1.7 | 3.4 | 5.5 | 4.7 | 1.0 | ||||
| May 2021 | 1.7 | 3.2 | 5.3 | 4.7 | 1.0 | ||||
| Sources: Cru, Yara |
|||||||||
