Urea, an essential component in the creation of fertilizer, plays a vital role in global agriculture. Let’s delve into its consumption patterns and the broader context:
1- Global Urea Consumption
In 2018, about 173 million tons of urea were consumed across the globe.
80% of urea is used directly for fertilizer purposes, which provides the main support for food production.
About 4% was mixed with other nutrients to create NPK blends (nitrogen, phosphorus and potassium).
Another 4% was utilized for biofuels production.
Approximately 12% urea is used in various industrial processes such as amino resins and melamine synthesis.
2- Urea Production and Overcapacity
Ammonia, a key intermediate, acts as the primary feed for urea production. Globally, more than half of ammonia is used for urea production.
China has seen significant capacity growth with a strategic plan, accounting for about one-third of the global increase in urea capacity from 2010 to 2018.
The world’s operating rates declined to 78 percent in 2018, and Chinese producers operated at an average rate of about 70 percent.
Factors contributing to overcapacity include changes in tariff policies, environmental regulations, and the availability of low-cost shale gas.
3- Urea Export and Trade
With exports of 8.8 million tons, China emerged as the largest exporter of urea in 2016
The competitive advantage of coal-based production routes (due to low coal prices) has influenced the market.
Despite challenges, the underlying overcapacity remains a concern for the industry
Ammonia gas is the simplest and most important hydrogenated compound of nitrogen atom. In the portfolio of products produced from ammonia, urea has allocated the largest share with 57%. Urea is used as the main chemical fertilizer in the world. The raw material for the production of ammonia is the synthesis gas, which is produced from natural gas, coal, as well as liquid fuels. In the ammonia product portfolio, urea accounted for the largest share at 57%. Urea has been used as the main chemical fertilizer in the world. In 2014, more than 166 million tons of urea were consumed globally, which has decreased by 3 million tons compared to the previous year. In 2016, about 178 million tons were consumed in the world. The interesting thing to note is that the Asia Pacific region has a 70% share in global consumption of urea, and in this region, China accounts for about 30% of the global consumption.
According to published statistics, the production capacity of urea from 2015 to 2035 will add about 100 million tons, which on average is about 5 million tons per year, which is equivalent to 5 production units with a capacity of one million tons. Meanwhile, China will account for a 40 percent share of the increase in production until 2035, and this country’s approach is to take out low-capacity units and build mega units.
