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Bad smell in the fertiliser trades?

Fertiliser cargo volumes have been increasing and new sources are being exploited but there are signs that demand growth may soften

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ABP recently completed a £1M investment in its Immingham Bulk Park agribulk terminal at Immingham
ABP recently completed a £1M investment in its Immingham Bulk Park agribulk terminal at Immingham

As the world’s population has risen and pressures on farmers to produce more food have intensified, there has been continued growth in the volumes of fertiliser cargoes shipped around the globe. This has resulted in new reserves being exploited and transport infrastructure improved, including the development of marine terminals, to facilitate its movement.

 

In 2018, an estimated 162 Mt of mainly potash, phosphates, sulphur and urea, plus processed fertilisers, such as DAP and NPK, were moved by ship, and this was equivalent to between 3% and 3.5% of the world’s total bulk trade. In 2019, volumes are expected to increase to 166 Mt, with 1.5% to 2.5% growth per annum then expected for the next four to five years.


But questions are being asked and it is debatable whether these rates of growth will be achieved, given the most recent economic forecasts outlined by OECD and the IMF. These organisations point to a slowdown in global economic output. Tensions between the US and China have not only affected trading patterns in agricultural commodities, but reduced the cargo volumes moved.

 

Moreover, campaigners across the world are calling on governments to introduce policies that more aggressively tackle climate change, people are being asked to eat less meat, and the agricultural sector is being pressurised to implement more sustainable and organic farming practices. That means using fewer pesticides and chemicals on crops. This could have a profound effect on the trade in fertilisers.


Tighter controls


In India and China, which are two of the biggest users of fertilisers in the world, tighter controls on their use, plus the introduction of more environmentally friendly policies by their governments, are cutting demand. There are also signs that demand is softening in some countries in Latin America and sub-Saharan Africa.


Meanwhile, in many producer nations, it is getting more difficult to secure mining licences, particularly for potash and phosphate. Safety regimes for factories producing nitrogen products are also being tightened. This is particularly the case in China where dozens of plants are being closed. Ultimately, this will affect the supply of fertilisers.

 

The Paris-based International Fertilizer Association (IFA) believes these trends will result in the global use of fertilisers slowing. In 2022/23, the organisation projects total usage of 199.6 Mt, up from 187.1 Mt in 2017/18, the latest year for which confirmed figures are available (see table, p23).

 

Nonetheless, new mines are being opened, particularly to extract phosphates, and often these developments are accompanied by upgrades to road, rail and port infrastructure.

 

In the UK, the deepsea Redcar Bulk Terminal (RBT) is to invest in equipment that will enable it to handle substantial volumes of polyhalite material that will be extracted from the Woodside mine being developed by Sirius Minerals in the area.

 

This follows a land lease and materials handling agreement signed last year between Sirius and RBT. Significantly, the deal includes the long-term lease on a parcel of land to the south of the marine terminal. A large specialised warehouse for phosphates will be developed on this site.


Sensitive location


Located close to the town of Whitby, the mine will extract the highest grade found anywhere in the world of polyhalite, a unique type of potash. As the mine is located in a UK national park, the material will be transported by an underground conveyor belt system to a processing facility in Teesside for granulation.

 

The mine is scheduled to open in the latter half of 2021, and production will be quickly ramped up to 10 Mtpa. At full operating capacity, the mine’s output will total 20 Mtpa. The majority of the polyhalite will be exported – hence the deal with RBT.

 

“We [RBT] have a hugely flexible operation and, coupled with ongoing investment in our port equipment and rail infrastructure, we’ve diversified our offer and continue to secure significant business in new markets,” explained Garry O’Malley, general manager of RBT. “This deal is excellent news for Teesside and we’re delighted to be working with Sirius Minerals on a project of such regional magnitude.”


Chris Fraser, managing director and CEO of Sirius, is also extremely positive about the deal. “By working with a local partner, we can develop our project and also deliver benefits to an existing established business in the Tees Valley,” he said. “The RBT facility has been underutilised since the closure of the steel works and this agreement will ultimately help us deliver tremendous economic benefits for the region.”

ICL Iberpotash expects to boost its green credentials with the development of a new €77M fertiliser
ICL Iberpotash expects to boost its green credentials with the development of a new €77M fertiliser

The Bell tolls


Elsewhere in the northeast of the UK, Associated British Ports (ABP) recently completed a £1M investment at the Immingham Bulk Park agribulk terminal at its namesake port. The decision followed a new five-year agreement concluded with Thomas Bell & Sons. The company, which is a major distributor of fertilisers and animal feed to farmers in the Midlands and north of England, will ship an additional 80,000t of cargo a year through the facility under the new deal.


ABP’s capital has been spent on building a fourth bagging plant and purchasing new handling equipment, including loading shovels and forklift trucks. It is the second large investment in the facility in just over two years after ABP and Thomas Bell spent £0.5M on constructing a bespoke fertiliser blending plant in 2016.


“We have been working with ABP Bulk Park for over 20 years, and in the past two years, both parties have made significant investments to support our brand, Diamond Fertilisers, and increase the range of products and services we offer our customers,” said Andrew Major, managing director of Thomas Bell. “The infrastructure at ABP in Immingham, including the location, storage facilities, ability to discharge cargoes up to 25,000t, and our blending production plant, have all contributed to and strengthened our position in the marketplace.”

 

In the southern UK, the port of Ipswich on the east coast of Suffolk recently commissioned a new plant for blending and bagging fertilisers. The port, which is located about 15 miles from Felixstowe, is very important in the agricultural sector, and this investment will help strengthen that role. The project was jointly supported by ABP, which owns Ipswich, and COFCO International UK.


“The new facilities at Ipswich are key in helping us develop our range of fertiliser products and services for our growing customer base across East Anglia and into the whole of the UK,” said Mark Dordery, managing director of COFCO.


He added: “Growers face increasing challenges to produce crops as cost-effectively as possible to meet consumer demands, whilst being increasingly aware of environmental requirements. The modern and highly efficient facilities at the new plant will help us refine our current fertiliser products, whilst allowing us to develop and introduce exciting new options. This includes Limus Nitrogen Management, BASF’s latest urea inhibitor technology, to help UK growers achieve greater production efficiency in the future.”


ABP and COFCO have spent £0.7M on the new plant, which is located within the port’s Coldock bulk bagging complex. It is the culmination of an ABP capital expenditure programme that has seen in excess of £2M invested in improving and expanding Ipswich’s fertiliser handling capacity in recent years.


Greening up


Elsewhere in Europe, ICL Iberpotash is investing over €77M in developing a new fertiliser handling facility in Barcelona. It is needed to handle salts and fertilisers mined from the group’s operations in the Bages region of Spain. Its construction is expected to considerably ‘green up’ and lower the costs of the company’s supply chain.


The new terminal will comprise a 400m wharf with a draught alongside of 14m, two warehouses that offer a storage capacity of 22,000 m2 , and an on-dock rail yard.

 

Cargo will be processed by two conveyor belts and two shiploaders, which feature outreaches of 420m and 417m. The handling system, which is being supplied by Italy’s Bedeschi Group, has a design capacity of 1,000 tph. Overall, the terminal will be capable of processing 4 Mtpa.

 

The facility, which is being operated under a 35-year build-operate transfer agreement with the port authority, is located in the Álvarez de la Campa dock area of the port. It is expected to open in late Q3/early Q4 of this year. Thereafter, expansion of the facility is possible, with Iberpotash saying that the storage capacity for salts could be increased from 100,000t to 140,000t, and that of potash from 120,000t to 160,000t.


India improves


In India, various new and refurbished bulk handling facilities have increased the country’s capacity to handle fertilisers. A case in point is Essar’s multipurpose Bulk Terminal Salaya Limited (EBTSL), which is located in the state of Gujarat. The terminal has a throughput capacity of 20 Mtpa and, alongside fertilisers, will also process bauxite, limestone and coal.

 

“The business potential of this asset is tremendous since this is the first deep-draught terminal in the region,” explained Deepak Sachdeva, CEO of EBTSL. “Quick turnaround times and our ability to handle vessels of up to 100,000 dwt give us a significant competitive edge when it comes to serving our customers.”


In Australia, the development of a new common-user multipurpose bulk terminal on Kooragang Island, Port of Newcastle, will give importers of fertilisers additional shipping options.


Approximately US$33M is being spent on combining berths 2 and 3 into a single dry bulk cargo handling complex, purchasing a highcapacity shiploader, and installing a new conveyor belt system.

 

In addition, electrical and other utility systems are being upgraded. To be called Newcastle Bulk Terminal, the port authority believes the facility will raise cargo handling productivity levels, shorten ship turnaround times and boost the port’s volumes of minor bulk commodities.

Big plans


Other regions where significant investment in new marine terminals for handling fertilisers is taking place are in Africa and the Black Sea, with Ukraine, Russia and Georgia all having large development projects underway (see page 9).


In Africa, Morocco-based OCP Group, which holds an estimated 75% of the world’s phosphate reserves, is involved in many projects as it seeks greater control of the market (see box story, p22).

 

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