Yara International ASA · OSL:YAR
Yara International ASA — Investor Presentation (February 2014)
90 slides from Yara International ASA's investor presentation, February 2014
Slide 1: Yara Fertilizer Industry Handbook
Yara Fertilizer Industry Handbook February 2014
Slide 2: List of contents
1 List of contents Fertilizer industry overview – What is fertilizer? p. 2 – The fertilizer industry p. 16 Fertilizer industry dynamics p. 26 – Ammonia p. 28 – Urea p. 33 Industry value drivers p. 39 – Drivers of demand p. 42 – Drivers of supply p. 60 – Price relations p. 67 – Production econo
Slide 3: What is fertilizer?
What is fertilizer?
Slide 4: Plants need nutrients to grow
3 Plants need nutrients to grow Soil conditions Nutrient behavior & other growth factors Nutrients have specific and essential functions in plant YIELD metabolisms They cannot replace each other, and lack of any one Calcium Potassium Phosphorus nutrient limits crop growth IR – Date: February 201
Slide 5: Nitrogen is the main driver of yield
4 What is fertilizer? Nitrogen is the main driver of yield IR – Date: February 2014
Slide 6: Why mineral fertilizer?
5 Why mineral fertilizer ? Supply of crop residues and organic fertilizer NPK • Export of nutrients N K with the harvest Organic P substance, humus Mineralisation S … Mg • Growing demand for food & feed Crop residues are decomposed to minerals Mineral fertilizers are necessary to replace those nutri
Slide 7: Nitrogen – the most important nutrient
6 Nitrogen – the most important nutrient Nutrient characteristics Primary benefit Application Industry structure Potassium 16% Improve Annual Fewer suppliers, (K) crop quality application production Phosphorus 23% not always discipline (P) done Increase crop Annual Industry more size app
Slide 8: Profitability of investment in mineral fertilizers
7 Profitability of investment in mineral fertilizers Yield response (monetary value) to N fertilizer rate Income USD/ha Yield, ton/ha The investment in nitrogen fertilizer 3,000 10.0 is highly profitable for growers 9.0 2,500 Fertilizer investment: 248 USD/ha 8.0 7.0 Net return: 1,711 USD/ha 2
Slide 9: Breakdown grain production costs
8 Breakdown grain production costs Example: 2013F average US corn production costs Fertilizers as part of US corn Seed production costs 15 % 30% Other 7% 25% 20% Fertilizer 24 % Land 15% 22 % 10% Chemicals Power & Machinery 4% 5% 24 % Labour 4% 0% 2000 2002 2004 2006 2008 2010 2012 2014F Source: USD
Slide 10: Nitrates vs. urea
9 Nitrates vs. urea Nitrate is the most important fertilizer in Europe Urea (CON2H4) Ammonium (NH4+) Nitrate (NO3-) Urea-N needs to be Ammonium-N is fixed onto Nitrate-N is always dissolved converted into ammonium- clay minerals in the soil and in the soil water and is N before it is plant therefore
Slide 11: Nitrate-based fertilizers are superior to urea agronomically and environmentally
10 Nitrate-based fertilizers are superior to urea both agronomical and environmentally The agronomical efficiency of nitrates is The carbon footprint is lower than for Urea superior to urea Nitrogen recovery (% of AN) Lifecycle carbon footprint (kg CO2 eq/kg N) 100 12 75 8 50 4 25 0 0 AN Urea UAN AN
Slide 12: Trial results in arable crops
11 Trial results in arable crops Winter wheat trials in UK from 1994-98 Application rate of 160 kg of N/ha Grain yield (t/ha) 9.0 8.8 8.6 8.4 8.2 Urea UAN CAN CN Source: Levington Agriculture, UK (1999) IR – Date: February 2014
Slide 13: Nitrates’ agronomic advantage has higher value for cash crops
12 Nitrates’ agronomic advantage has higher value for cash crops than for commodity crops Crop value with nitrates Increase in crop production value €/ha Index using nitrates instead of urea 3,500 1,200 3,192 1,016 3,000 1,000 2,500 800 2,000 1,553 600 1,500 400 1,000 500 200 100 0 0 Wheat/UK Orange
Slide 14: Fertilizer characteristics: Organic compared to mineral fertilizer
13 Fertilizer characteristics: Organic compared to mineral fertilizer Characteristics Organic fertilizer Mineral fertilizer Nutrient Crop residues and animal Nitrogen from the air and minerals source manures from the soil Nutrient Low concentration High concentration concentration Nutrient Variable
Slide 15: Organic farming represents only a marginal share of cultivated land
14 Organic farming represents only a marginal share of total cultivated land 40 0.9% 3% 35 0.8% 7% 0.7% 30 10% Oceania 0.6% 33% 25 Europe 0.5% Latin America 20 0.4% 18% Asia 15 North America 0.3% Africa 10 0.2% 5 0.1% 29% - 0.0% 2005 2006 2007 2008 2009 2010 2011 Ha, billions Share of cultivated lan
Slide 16: Fertilizer production routes
15 Fertilizer production routes Natural gas Ammonia plant CO2 Air NH3 Urea Air Nitric acid plant HNO3 Ammonium nitrate Rock Nitrophosphate plant Calcium nitrate Salts of K, Mg, S NPK fertilizers Rock Phosphoric acid plant H2PO4 DAP / MAP H2SO4 Rock Sulphuric acid plant Triple Super Phosphate Rock IR
Slide 17: The fertilizer industry
The fertilizer industry
Slide 18: Consumption per nutrient
17 Consumption per nutrient Million tons nutrient 140 120 N 1.4% growth pa. 100 80 60 P 1.7% growth pa. 40 20 K 2,8% growth pa. 0 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016F Source: IFA, June 2013 IR – Date: February 2014
Slide 19: Nitrogen consumption in key regions
18 Nitrogen consumption in key regions Million tons nitrogen 40 Rest of Asia: 2.3% * 35 China: 0.4% * 30 25 20 Europe: 1.6% * 15 North America: 0.0% * 10 Latin America: 3.6% * 5 0 1999 2001 2003 2005 2007 2009 2011 2013F 2015F 2017F Source: IFA, June 2013 * CAGR 12-17 IR – Date: February 2014
Slide 20: Key global fertilizer products
19 Key global fertilizer products Nitrogen N Other Ammonia 12 % 4% DAP/MAP 7% Potash K2O Phosphate P2O5 NPK Urea 8% 56 % Other Other 2% TSP 9% AN/CAN 8% 6% UAN NPK SSP 5% 26 % 10 % 108 million tons* DAP/MAP 56 % MOP/SOP NPK 72 % 20 % 29 million tons 41 million tons Source: IFA 2012 (nutrient totals)
Slide 21: Nitrogen fertilizer demand – key markets
20 Nitrogen fertilizer demand – 5 key markets West /central Europe (10.3 mt) China (33.8 mt) DAP/MAPOther USA (12.1 mt) Other 9% 2% DAP/MAP 9% NPK Other 2% 5% DAP/MAP 8% Urea 6% 18% Urea NPK 22% NPK 8% ABC 16% 17% Urea 67% UAN Ammonia Nitrates UAN 11% 27 % 43% 27% Nitrates 2% India (17.4 mt) Other B
Slide 22: Nutrient application by crop
21 Nutrient application by crop N+P+K NITROGEN Other Other 12% Wheat 12 % Wheat 16% 18 % Fruit & veg Fruit & veg 15 % 15% Rice 14% Rice Sugar crops 15 % 4% Sugar crops Cotton 4% 4% Maize Maize Cotton Oilseeds 16% Roots/Tubers 17 % 4% 11% 3% Oilseeds Other cereal 7% Other cereal 5% 5% Source: IFA (20
Slide 23: Nitrogen application by crop
22 Nitrogen application by crop Russia EU-27 USA Other Other Wheat 21% Oilseeds 27% 28% 2% Wheat Other Maize 33% 48% Fruits & 7% Maize Maize Sugar China 49% vegtables Other Other 13% crops 7% cereals Other Oilseeds cereals 8% 15% 14% cereals Wheat 10% Cotton Wheat 3% 13% 16% Fruits & Fruits & 3% veg
Slide 24: Fertilizer company comparison
23 Fertilizer company comparison Revenues - USD billion Yara Agrium Mosaic* L4Q 2012 PCS K+S ICL CF 0 2 4 6 8 10 12 14 16 18 * 12 months ending May 2013 Source: Thomson Worldscope IR – Date: February 2014
Slide 25: Yara – the leader in nitrogen fertilizers
24 Yara – the leader in nitrogen fertilizers Global no 1 in NPK Global no 1 in ammonia Global no 1 in nitrates complex fertilizer Production capacity* (mill t) Production capacity* (mill t) Production capacity* (mill t) 9 7 8 8 6 7 7 6 5 6 5 5 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 Yara CF GDF Agrium PCS Yar
Slide 26: Yara – the European cost leader
25 Yara – the European cost leader Production cost index: 100 = European FE average excl. Yara Ammonia cost position Nitrate cost position Index Index 110 110 100 100 90 90 80 80 70 70 60 60 50 50 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2001 2002 2003 2004 2005 2006 2007 2008 200
Slide 27: Fertilizer industry dynamics
Fertilizer industry dynamics
Slide 28: Potential industry concerns and associated mitigants
27 Potential industry concerns and associated mitigants Weaknesses and risks Mitigating factors Over-investment at the top Rising construction costs and lead times, reduced state of the cycle ownership Spin-offs from chemical/energy companies followed by Weak players/lack of focus consolidation Long
Slide 29: Ammonia
Ammonia
Slide 30: Ammonia production
29 Ammonia production Total production 10 largest producers Million tons Million tons 180 60 160 50 140 40 120 30 100 20 80 10 60 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 China India USA Saudi Arabia Ukraine Russia Indonesia Egypt Canada Trinidad 2002-2012 trend growth rate = 2.3%/ye
Slide 31: Most ammonia produced is upgraded to urea or other fertilizers
30 Most of the ammonia produced is upgraded to urea or other fertilizers Ammonia trade Ammonia use Million tons Million tons 25 160 139 Total world trade 140 20 120 15 100 80 10 60 Yara trade 40 32 5 20 0 0 02 03 04 05 06 07 08 09 10 11 12 Fertilizer Industrial use Urea Nitrates DAP/MAP NPK Other N
Slide 32: Global ammonia trade in 2012
31 Global ammonia trade in 2012 10 largest exporters 10 largest importers Million tons Million tons 7.0 5.0 4.5 6.2 4.5 6.0 4.0 5.0 3.5 3.2 3.0 4.0 2.5 3.0 2.0 1.6 1.5 1.2 2.0 1.8 1.2 1.0 1.2 1.0 0.8 0.7 0.7 0.5 1.0 0.8 0.8 0.7 0.7 0.6 0.5 0.4 0.4 0.0 0.0 Saudi Arabia Ukraine Iran Russia Indonesia C
Slide 33: Main ammonia trade flows 2012
32 Main ammonia trade flows 2012 Million tonnes 1.9 1.2 0.9 0.8 0.8 0.6 3.1 3.8 0.4 1.3 1.0 Source: IFA IR – Date: February 2014
Slide 34: Urea
Urea
Slide 35: Urea production in 2012
34 Urea production in 2012 Total production 10 largest producers Million tons Million tons 180 60 160 50 140 40 120 30 22.5 100 20 80 10 6.9 6.5 6.2 4.6 4.4 4.2 4.1 3.8 60 0 India USA China Indonesia Russia Pakistan Iran Egypt Canada Qatar 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2002-
Slide 36: Global urea trade in 2012
35 Global urea trade in 2012 10 largest exporters 10 largest importers Million tons Million tons 8.0 9.0 6.9 8.0 7.0 8.0 7.1 7.0 6.0 4.8 6.0 5.0 4.2 5.0 4.0 3.6 3.1 3.1 4.0 2.9 3.0 3.0 2.2 3.0 2.3 2.0 1.8 1.4 2.0 1.5 1.4 1.0 1.1 1.0 0.9 0.8 1.0 0.0 0.0 Saudi Arabia Ukraine Iran China Russia Oman Egy
Slide 37: Main urea trade flows 2012
36 Main urea trade flows 2012 Million tonnes 0.6 1.4 1.4 1.6 1.4 3.7 1.4 4.0 1.4 0.5 0.9 4.0 9.3 1.1 1.3 1.7 Source: IFA IR – Date: February 2014
Slide 38: Short-term urea balance impacted by Chinese export taxes
37 Short-term urea balance impacted by Chinese export taxes Accumulated urea exports Urea price and export tax Kilotons USD per ton Export tax 8,000 600 120 % 7,000 2010 2012 500 100 % 6,000 400 80 % 5,000 2013 2008 4,000 300 60 % 2011 2009 3,000 200 40 % 2,000 100 20 % 1,000 0 0 0% * Export tax dur
Slide 39: Chinese domestic urea price and export tax set the export floor price
38 Chinese domestic urea price and export tax set the export floor price Chinese domestic urea price RMB/t 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 Source: China Fertilizer Market Week IR – Date: February 2014
Slide 40: Industry value drivers
Industry value drivers
Slide 41: Key value drivers
40 Key value drivers Ammonia fob Black Sea (USD/t) Urea prilled fob Black Sea (USD/t) CAN cif Germany (USD/t) 600 545 600 500 466 525 516 499 477 500 500 379 423 407 400 337 400 357 400 316 341 308 300 261 289 244 240 300 264 300 249 214 229 240 245 240 220 223 187 185 175 200 164 200 200 143 139 10
Slide 42: Nitrogen fertilizer value drivers
41 Nitrogen fertilizer value drivers Drivers Effect on European / Ukrainian gas Supply-driven price for urea prices and Chinese coal prices Grain inventories/prices Urea demand New urea capacity vs. closures Urea supply Revenue drivers Global urea demand vs. supply Urea price (above floor) U
Slide 43: Drivers of demand
Drivers of demand
Slide 44: Drivers of nitrogen consumption growth
43 Drivers of nitrogen consumption growth Fertilizer consumption – Population growth – Economic growth (improved diets) – More meat consumption in developing countries – More protein-rich diets – More fruit and vegetables – Reduce hunger – Biofuels Industrial consumption – Economic growth – Envi
Slide 45: Grain consumption growth stronger than population growth
44 Grain consumption growth stronger than population growth Million tons Billions 2,500 12 US drought resulting in 3.5% drop in production, low stocks, demand rationing and spiking prices 10 2,000 3% drop in production 3% drop in production, low stocks, demand rationing and 8 4% drop in production,
Slide 46: Diet change the most important factor for growth in food consumption
45 Diet change the most important factor for growth in food consumption Impact on food consumption 1998-2008 Fertilizer consumption for food crop** Million tons grain equivalent* Million tons nutrients 2,200 126 Grain eq. consumption 1998 Diet change 240 14 (same cal/cap and pop) Increased calorie c
Slide 47: Higher meat consumption requires more feed grain
46 Higher meat consumption requires more feed grain Significant potential for increasing Feed grain multipliers for meat meat consumption in emerging countries production World Poultry 2X EU North America Pork 4X Latin America Asia Beef 7X Africa 0 20 40 60 80 100 120 140 0 1 2 3 4 5 6 7 8 9 Kg/capi
Slide 48: Increasing population and reduced land available per capita
47 Increasing population and reduced land available for food production per capita Very limited potential to 0.5 10 increase farmable land Population (billion) Improved living Hectares/person 0.4 8 0.3 6 standards increase protein consumption per 0.2 4 person, requiring more grain for animal fee
Slide 49: Long-term grain price development underlines productivity challenge
48 Long-term grain price development underlines productivity challenge FAO Food price index 2002-2004=100 300 250 200 150 100 50 0 Food Price Index Cereals Price Index IR – Date: February 2014
Slide 50: Production per capita has improved but remains lower than in the 80s
49 Production per capita has improved but remains lower today than in the 80s Kg/capita 350 Peak: average 1983-1986: 326 kg/capita Average 2009-2012 340 319 kg/capita 330 320 310 300 290 280 Average 2002-2003 270 289 kg/capita 260 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Source: U
Slide 51: Record 2013 crop adds only 1 day of consumption to grain stocks
50 Record 2013 crop add only 1 day of consumption to global grain stocks Grain consumption and production Days of consumption in stocks Million tons Days 2,500 85 2,450 2,400 80 2,350 75 2,300 2,250 70 2,200 2,150 65 2,100 2,050 60 2,000 1,950 55 06 07 08 09 10 11 12 13E 14F 06 07 08 09 10 11 12 13E
Slide 52: Mineral fertilizer essential to sustain future yield increases
51 Mineral fertilizer essential to sustain future yield increases 1 tonne of grain requires ~25kg nitrogen Increased production of Tons of cereals mineral fertilizers per hectare necessary to meet future 4.5 nutrient demand 4.0 3.5 3.0 Limited potential for 2.5 Mineral fertilizer recycling organ
Slide 53: Key crops by producing region
52 Key crops by producing Maize-global production 840 mt Wheat-global production 651 mt EU-27 Other United Other 20% 26% States 32% 32% Ukraine China 3% 18% US EU-27 China 10% 7% Brazil 24% Russia India 8% 6% 14% Rice-global production 464 mt Soybeans-global production 268 mt India 4% Other China 10
Slide 54: Agricultural profile – key regions
53 Agricultural profile – key regions Arable land, top 3 crops area harvested and nitrogen application. EU 107 mill ha USA China Wheat (26.1) 116 kg/ha 160 mill ha Barley (11.9) 112 mill ha Maize (8.9) 153 kg/ha Maize (34.0) 168 kg/ha Maize (33.6) 149 kg/ha Soybean (29.9) 3 kg/ha Rice (30.3) 166 kg/
Slide 55: Large variations in yields across regions
54 Large variations in yields across regions Maize yields Wheat yields Tons/Ha Tons/Ha 9 8 8 7 7 6 6 5 5 4 4 3 3 2 2 1 1 0 0 US Argentina China Brazil Mexico France China India US Russia Rice yields Soybean yields Tons/Ha Tons/Ha 8 3 7 3 6 5 2 4 2 3 1 2 1 1 0 0 China Viet Nam Indonesia India Banglad
Slide 56: Biofuels: high-level outlook
55 Biofuels: high-level outlook Global ethanol production MB/D 2,500 2,000 FSU Africa 1,500 Asia/Pacific Latin America 1,000 EU-28 Canada 500 U.S. 0 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E 2015E 2020E 2025E Source: PIRA, October 2013 IR – Date: February 2014
Slide 57: N-fertilizer consumption from biofuels production
56 N-fertilizer consumption from biofuels production Million tons N 2.5 2.0 2.0 1.5 1.0 0.6 0.5 0.5 0.3 0.0 US - maize for Europe - rapeseed Brazil - sugarcane for Others ethanol for biodiesel ethanol Source: IFA IR – Date: February 2014
Slide 58: The effect on fertilizer consumption of genetically modified crops
57 The effect on fertilizer consumption of genetically modified crops Cropped area by trait, Cropped area by crop, Million hectares Million hectares Rapeseed 9 Cotton HT + IR 19 41 Herbicide Soybean tolerance 81 Insect (HT) resistance 100 Maize (IR) 40 23 Source: ISAAA IR – Date: February 2014
Slide 59: Fertilizer reduces carbon footprint from farming
58 Fertilizer reduces carbon footprint from farming Fertilizer - an efficient solar energy catalyst Production marginal part of carbon footprint - efficient application more important Huge positive effects of fertilizer use by lower land use Production Application Yara’s production more energy
Slide 60: Seasonality in fertilizer consumption
59 Seasonality in fertilizer consumption Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Corn USA China Europe Brazil, first crop Brazil, second crop Wheat China (winter wheat) China (spring wheat) India (Rabi) USA (winter wheat) USA (spring wheat) Europe (winter wheat) FSU (winter wheat) Rice China
Slide 61: Drivers of supply
Drivers of supply
Slide 62: Nitrogen value chain
61 Nitrogen value chain Raw Intermediate Finished Industrial material products products products H, Ar, CO etc Industrial gases C02 Ammonia Ammonia Environmental Urea products Natural gas Nitric acid Industrial nitrogen Nitric acid Nitrates chemicals Calcium Nitrate IR – Date: February 2014
Slide 63: Nitrogen technology developments
62 Nitrogen technology developments 450 400 Birkeland-Eyde electric arc method 350 300 GJ/tN 250 Cyanamid method 200 150 Haber-Bosch synthesis 100 Steam reforming natural gas 50 Theoretical minimum 0 1910 1915 1930 1950 1960 1975 2000 IR – Date: February 2014
Slide 64: Energy consumption in ammonia production
63 Energy consumption in ammonia production Energy consumption per ton ammonia (relative index) 140 118 120 120 113 107 100 100 80 China’s coal-fired 60 ammonia plants use 70% more energy and emit 2.5 40 times more CO2 20 0 Yara Europe US Romania & Russia Europe ex Yara Bulgaria Source: Fertilizer E
Slide 65: Projected nitrogen capacity additions outside China
64 Projected nitrogen capacity additions outside China in line with historical consumption growth Urea capacity growth relative Year Driving regions to nitrogen capacity Excluding China Excluding China Qatar 26% 2013 1.2% (1.4%) UAE 20% Iran 28% 2014 1.5% (1.8%) Algeria 26% Algeria 23% 2015 3.8% (3.
Slide 66: 5 year typical construction time for nitrogen fertilizer projects
65 5 year typical construction time for nitrogen fertilizer projects* 4–6 years Business development Concept Prepare Feasibility selection for Construction Operation phase phase execution Gas agreement 12-24 months 30-36 months depending on complexity 6-12 months - check cost assumptions by approach
Slide 67: Global urea capacity utilization
66 Global urea capacity utilization Urea capacity utilization 100% 95% 90% Excluding China 85% 80% 75% 70% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013F2014F2015F2016F2017F Source: Fertecon Aug 2013 IR – Date: February 2014
Slide 68: Price relations
Price relations
Slide 69: Upgrading margins from ammonia to urea
68 Upgrading margins from ammonia to urea USD/tonne 900 800 700 600 500 400 300 200 100 0 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Jan 12 Jan 13 Jan 14 Urea fob Black Sea 0.6 * Ammonia fob Black sea + 15 Source: Average of international publications IR – Date: Feb
Slide 70: Grain prices important for fertilizer demand
69 Grain prices important for fertilizer demand USD/mt USD/t 350 700 300 600 250 500 200 400 150 300 100 200 50 100 0 0 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Corn Urea fob Middle East Source: World Bank, Fertilizer publications IR – Date: February 2014
Slide 71: Only shorter periods with supply-driven urea market
70 Only shorter periods with supply- driven urea market 600 Urea price, fob Yuzhny 500 400 300 200 100 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E Europe oil index Ukraine (Fertecon) US China Source: Fertecon (Ukraine), Yara estimates IR – Date: February 2014
Slide 72: Nitrate premium is mainly a function of crop prices and marketing
71 Nitrate premium is mainly a function of crop prices and proper marketing CAN price, USD/t Wheat price, USD/t 450 400 400 350 350 300 300 250 250 200 200 150 150 100 100 50 50 0 0 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 12/13 Adjusted urea* Nitrate premium, USD/t Wheat price *
Slide 73: Grain/oilseed prices – yearly averages
72 Grain/oilseed prices – yearly averages USD/bu Wheat (HRW US Gulf) USD/t Rice (Thailand) 10 700 600 8 500 6 400 4 300 200 2 100 0 0 2003 2005 2007 2009 2011 2013 2003 2005 2007 2009 2011 2013 USD/bu Corn (US Gulf) USD/bu Soybeans (cif Rotterdam) 8 20 7 6 15 5 4 10 3 2 5 1 0 0 2003 2005 2007 2009 2
Slide 74: 10-year fertilizer prices – monthly averages
73 10-year fertilizer prices – monthly averages Ammonia fob Black Sea CAN cif Germany USD/t USD/t 1,000 500 800 400 600 300 400 200 200 100 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Urea prilled fob Black Sea DAP fob US Gulf USD/t USD/t 8
Slide 75: Production economics
Production economics
Slide 76: Yara’s operating cash costs are mainly variable
75 Yara’s operating cash costs are mainly variable Operating cash costs 2012 NOK Billions Temporary plant closures can be 80 made speedy and with limited stop/start costs 70 60 Example for ammonia/urea plants: 50 – Takes half a week to stop and a Variable costs (90%) - Dry raw materials week to
Slide 77: Ammonia cash cost build-up – example
76 Ammonia cash cost build-up – example Gas price: 8 USD/MMBtu 36 MMBtu natural gas/tonne ammonia x Gas consumption: 36 MMBtu/mt NH3 = Gas cost: 288 USD/mt NH3 + Other prod. cost: 26 USD/mt NH3 = Total cash cost 314 USD/mt NH3 Ammonia (NH3) (82% N) Typical natural gas consumption for ammonia product
Slide 78: Urea cash cost build-up – example
77 Urea cash cost build-up – example Ammonia price: 314 USD/mt NH3 36 MMBtu natural gas/tonne ammonia x Ammonia use: 0.58 NH3/mt urea = Ammonia cost 182 USD/mt urea Ammonia (NH3) + Process gas cost* 41 USD/mt urea (82% N) + Other prod. cost**: 22 USD/mt urea = Total cash cost 245 USD/mt urea 0.58 mt
Slide 79: Theoretical consumption factors
78 Theoretical consumption factors Ammonia P and K (82% N) Urea AN CAN NPK (46% N) (33.5% N) (27% N) (15-15-15)* * There are several NPK formulas. 15-15-15 is just an example IR – Date: February 2014
Slide 80: Main phosphate processing routes
79 Main phosphate processing routes 2006 production and exports, million tons P2O5 Phosphate rock Rock production: 191 (72% BPL*, 33% P2O5 ) Rock exports: 31 Sulphur** Production: 42 Phosphoric acid (100% P2O5) Export: 4.4 Ammonia ( 82% N) DAP MAP TSP (18% N, 46% P2O5) (11% N, 52% P2O5) (46% P2O5) P
Slide 81: Industrial applications
Industrial applications
Slide 82: Industrial nitrogen applications
81 Industrial nitrogen applications H2S abatement in oil fields H2S abatement Technical nitric in sewage acid Cleaning/ scrubbing AdBlue ®/heavy-duty vehicles NITCAL® Concentrated Aqueous nitric acid Vessels (Yarwil) ammonia DIPCAL® Acrylonitrile Stationary sources CN Glue NOX ANFO abatement Dry ice
Slide 83: Industrial use accounts for 19% of global nitrogen consumption
82 Industrial use accounts for 19% of global nitrogen consumption ~26 million tons N ~8 million tons N as urea Environment Environment 3% 5% Other 16% Explosives Melamine 20% 15% Chemicals 77% Glue 64% 19% of total N consumption 10% of total urea consumption Source: Yara estimates IR – Date: Februar
Slide 84: Global demand for nitrogen chemicals for industrial applications is strong
83 Global demand development of nitrogen chemicals for industrial applications is strong Million tons N 40 35 Urea 30 Nitric Acid 25 20 Ammonia, DeNOx 15 Ammonia, TAN 10 Ammonia, P-Chem 5 0 2010 2015E 2020E Estimated growth of Industrial applications is 10 million tons N (3.3 % annual growth) Source
Slide 85: Urea and ammonia based solutions to improve air quality
84 Example Urea and ammonia based solutions to improve air quality Air1 Automotive, off and on road NOxCare Stationary Yarwil Maritime Nitrogen oxides emissions lead to ground ozone layer and acid rain Urea or ammonia combined with an SCR catalyst, eliminates up to 90% NOx emissions Legislation requ
Slide 86: Technical Nitrates for Civil Explosives
85 Example Technical Nitrates for Civil Explosives Various grades of Ammonium Nitrate and Calcium Nitrate for use in the civil explosives and mining industries IR – Date: February 2014
Slide 87: CO2 has numerous industrial applications
86 Example: CO2 has numerous industrial applications Food additive: High-quality CO2 for beverage carbonisation Industries Served : Food care: Breweries CO2 for greenhouses, chilling Dairies and freezing, processing and Bakeries transport Meat and Poultry processing Animal care: Fish Farmi
Slide 88: Calcium nitrate for H2S abatement
87 Calcium nitrate for H2S abatment • Hydrogen Sulphide (H2S) is a highly toxic, odorous, and corrosive gas formed in Industries Served : wastewater systems. It Municipalities represents a significant health Wastewater treatment risk potentially causing loss of smell, eye irritation, rhinitis an
Slide 89: Sources of market information
88 Sources of market information Fertilizer market information – FMB www.fmb-group.co.uk – Fertecon www.fertecon.com – Fertilizer Week www.cruonline.crugroup.com – Profercy www.profercy.com – The Market www.icispricing.com – Green Markets (USA) www.greenmarkets.pf.com – Beijing Orient Business (Ch
Slide 90: www.yara.com
www.yara.com
Yara International — Investor Presentation (February 2014) on 6ix