Argus Media Ltd.

PRIVATE & CONFIDENTIAL

 Argus Media Ltd. PRIVATE & CONFIDENTIAL

Contents
Contents.................................................................................................................................................. iii
Executive Summary ................................................................................................................................ vi
Chapter 1: Introduction............................................................................................................................ 1
Chapter 2: World Nitrogen Fertilizer Demand to 2027 ............................................................................ 9
2.1 Nitrogen Fertilizer Outlook ............................................................................................................. 9
2.1.1 Asia...................................................................................................................................... 14
2.1.3 North America...................................................................................................................... 15
2.1.4 Latin America....................................................................................................................... 17
2.1.2 East Europe ......................................................................................................................... 21
2.1.5 Africa ................................................................................................................................... 22
2.1.6 Oceania ............................................................................................................................... 23
2.2 Role of Ammonia/Urea/UAN and Other N Products .................................................................... 24
Single Nutrient Products .......................................................................................................... 24
NP/NPKs.................................................................................................................................. 25
Chapter 3: The International Gas Market & Outlook for Feedstock Costs ............................................. 27
3.1 Introduction.................................................................................................................................. 27
3.2 Gas price formation ..................................................................................................................... 28
3.2 North America ............................................................................................................................. 34
3.3 Europe ......................................................................................................................................... 43
3.4 South Asia ................................................................................................................................... 51
3.4.1 India ..................................................................................................................................... 51
3.4.2 Pakistan ............................................................................................................................... 54
3.4.2 Bangladesh.......................................................................................................................... 56
3.5 China ........................................................................................................................................... 56
3.6 Other Regions ............................................................................................................................. 62
Chapter 4: Outlook for Merchant Ammonia Demand to 2027 ................................................................ 69
4.1 The US ........................................................................................................................................ 70
Supply ...................................................................................................................................... 71
Demand ................................................................................................................................... 77
4.2 West Europe Net Imports ......................................................................................................... 83
4.3 Africa ........................................................................................................................................... 84
4.4 India............................................................................................................................................. 87
4.5 South East Asia ........................................................................................................................... 89
4.6 East Asia ..................................................................................................................................... 91
4.7 Latin America .............................................................................................................................. 93
4.8 Other ........................................................................................................................................... 96
4.9 Summary Outlook........................................................................................................................ 97
Chapter 5: Outlook for Ammonia Exports to 2027.................................................................................. 99
5.1 Introduction.................................................................................................................................. 99
5.2 West of Suez ............................................................................................................................. 102
5.2.1 Russia & Ukraine ............................................................................................................... 102
5.2.2 Americas............................................................................................................................ 104
Canada .................................................................................................................................. 104
Latin America ......................................................................................................................... 104
5.2.3 Africa ................................................................................................................................. 106
5.3 East of Suez .............................................................................................................................. 109
5.3.1 Middle East ........................................................................................................................ 109
5.3.2 Australia/Asia..................................................................................................................... 111
Australia ................................................................................................................................. 111
Asia ........................................................................................................................................ 112
5.4 Summary Outlook...................................................................................................................... 114

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 Argus Media Ltd. PRIVATE & CONFIDENTIAL

Chapter 6: Price Forecasts to 2027 ..................................................................................................... 119

6.1 Recent Pricing Developments ................................................................................................... 119
6.2 Long-term Trends ...................................................................................................................... 120
6.2.1 Yuzhnyy-Middle East Differentials ..................................................................................... 124
6.2.2 Yuzhnyy-Tampa Differentials............................................................................................. 125
6.3 Short/Medium-term Outlook & the Merchant Ammonia Balance ............................................... 127
Appendices .......................................................................................................................................... 132

Tables
Table I: Merchant Ammonia - Shifting Regional Trade Patterns ix
Table 1.1: Ammonia Production by Usage, 2009 estimates 1
Table 1.2: Direct Application Ammonia Consumption by Country 3
Table 2.1: World Nitrogen Fertilizer Consumption, 2000-2027 9
Table 2.2: Brazil Corn, Soybeans and Sugarcane Outlook 19
Table 2.3: Brazil - Fertilizer Use by Key Crop 19
Table 3.1: Ammonia/Urea Operating Costs and Gas Pricing 27
Table 3.2: Brent Oil Price Forecast to 2027 30
Table 3.3: Henry Hub Gas Price Outlook Forecast to 2027 42
Table 3.4: Contract German Border (Russian) Gas Price Outlook (Russian gas) to 2027 44
Table 3.5: Coal Feedstock in China 58
Table 3.6: Indonesia Natural Gas Feedstock Costs for Fertilizer Production 66
Table 4.1: Ammonia Import Demand, 2011 69
Table 4.2: US Ammonia Capacity Closures & Re-start Potential 73
Table 5.1: Ammonia Exports, 2011 99
Table 5.2: Ammonia Trade Matrix, 2011 100
Table 5.3: Major (Firm) Net Ammonia Capacity Changes, 2012-2015 114
Table 5.4: New Unfirm Net Ammonia Capacity Additions, 2015-2027 114
Table 5.5: Ammonia Exports by Region, 2011-2027 115
Table 5.6: East of Suez Ammonia Trade Balance to 2027 116
Table 5.7: Americas Ammonia Trade Balance to 2027 116
Table 5.8: Europe & North/West Africa Trade Balance to 2027 117
Table 6.1: Long-term Normal Market Yuzhnyy Ammonia Prices & Transition 123
Table 6.2: Ammonia Price Outlook to 2027 131
Table A.1: Firm Downstream Changes in Net Ammonia Demand, 2010-2015 133
Table B.1: Ammonia Exports to 2027 137
Table B.2: Ammonia Imports to 2027 140

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Figures
Figure I: Yuzhnyy Ammonia fob: Historical & New Normal Market Cycle Range vi
Figure II: Merchant Ammonia Trade to 2027 (mn tonnes) viii
Figure III: Yuzhnyy Ammonia Price Outlook (Current US$/t) xi
Figure 1.1: Ammonia Trade by End-Use, 2007 2
Figure 1.2: World Ammonia Trade, 1995-2012 (mn tonnes) 7
Figure 1.3: Indian Diammonium Phosphates Production & Imports (mn tonnes) 7
Figure 2.1: World Grains Stocks-to-Use Ratios 10
Figure 2.1: Major Crop Export Prices 11
Figure 2.2: World Nitrogen Fertilizer Demand versus Population to 2027 13
Figure 2.3: Global Nitrogen Fertilizer Availability to 2027 (kg per capita) 13
Figure 2.4: Indian Fertilizer Subsidy Bill (US$ billions) 15
Figure 2.5: US Renewable Fuel Requirement (bn USG) 16
Figure 2.6: Brazil Soybeans, Maize and Sugarcane Harvested Area (million ha) 18
Figure 2.7: Major Crop Belts Brazil 20
Figure 2.8: Post-FSU Cereals Production, 1990-2010 (mn tonnes) 21
Figure 2.9: World Nitrogen Fertilizer Demand by Region to 2027 (mn tonnes N) 23
Figure 3.1: Average Monthly Oil Prices (US$ per bl) 29
Figure 3.2: International Gas Prices 31
Figure 3.3: North American Gas Prices 34
Figure 3.4: US Rig Count and Gas Production 35
Figure 3.5: Natural Gas Production EIA Schematic Summary 36
Figure 3.6: US Dry Gas Supply to 2040 38
Figure 3.7: US projected LNG supply balance (mn t/yr) 39
Figure 3.8: Indian Urea Capacity and Natural Gas Infrastructure 53
Figure 4.1: Top-8 Ammonia Importers, 2011 (mn tonnes) 70
Figure 4.2: US Ammonia Imports, 1995-2012 (mn tonnes) 70
Figure 4.3: US Nitrogen Fertilizer Demand by Product (mn tonnes N) 78
Figure 4.4: US Nitrogen Fertilizer Demand by Product Share (%) 79
Figure 4.5: US Ammonia Imports, 2010-2027 (mn tonnes) 82
Figure 4.6: West European Net Imports of Ammonia (million tonnes) 83
Figure 4.7: Africa Imports of Ammonia (million tonnes) 84
Figure 4.8: Africa Ammonia Imports, 2010-2027 (mn tonnes) 85
Figure 4.9: Indian Compound Fertilizer Production & Ammonia Imports 87
Figure 4.10: India Ammonia Imports to 2027 (thousand tonnes) 89
Figure 4.11: South East Asia Ammonia Imports to 2027 (thousand tonnes) 89
Figure 4.12: East Asia Ammonia Imports to 2027 (thousand tonnes) 91
Figure 4.13: Latin America Ammonia Imports to 2027 (thousand tonnes) 93
Figure 4.14: World Ammonia Import Demand to 2027 (mn tonnes) 97
Figure 5.1: Top-12 Ammonia Exporters, 2011 (mn tonnes) 99
Figure 5.2: EECA Ammonia Exports to 2027 (thousand tonnes ) 102
Figure 5.3: Latin America Ammonia Exports to 2027 (thousand tonnes) 105
Figure 5.4: Africa Ammonia Exports to 2027 (thousand tonnes) 106
Figure 5.5: Middle East Ammonia Exports to 2027 (thousand tonnes) 109
Figure 5.6: Asia Ammonia Exports to 2027 112
Figure 6.1: Yuzhnyy Ammonia fob: Historical & New Normal Market Cycle Range 119
Figure 6.2: Yuzhnyy Ammonia fob: Revised Normal Market Cycle 120
Figure 6.3: Middle East and Black Sea Ammonia Price Differentials (US$/t) 124
Figure 6.5: Tampa-Caribbean Ammonia Price Differential 125
Figure 6.6: Incremental Ammonia Capacity versus Downstream demand changes 127
Figure 6.7: Yuzhnyy Ammonia Price Outlook 130

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