The new AUM plant in Trinidad is expected to begin UAN production during the first half of November. The plant will pump some 1.5 million mt/y of UAN into the market, with company expectations that some two-thirds of that will go to North America. Helm Fertilizer Corp., which owns an equity stake in the venture, is marketing the product.
AUM also has the capacity to produce 1,850 mt/d of anhydrous ammonia; however, most of that will go into UAN production. Koch Nitrogen has been marketing the ammonia in the meantime. In addition, the plant will produce 60,000 mt of melamine.
Earlier this year, Helm entered into a long-term lease agreement with IC Rail Marine Terminal to construct a 60,000 ton capacity UAN solution terminal in Convent, La. (GM Feb. 9). Construction of the terminal is planned to coincide with the startup of the AUM plant. The Convent location, accessible by ocean-going vessels, will serve as one of the principle distribution points for Helm in North America. Helm says this terminal, combined with Helm’s existing network of owned and leased terminals, will enable the company to provide reliable and consistent service to barge, rail, and truck customers in key UAN markets.
In the meantime, large North American UAN producers are hopeful the new Trinidad plant will not have a major impact on them. Terra Industries Inc. President and CEO Michael Bennett recently told analysts that he believes the market is big enough to normalize this production very easily and it is not an overriding concern for Terra. Instead, Bennett believes the Trinidad tons will more likely compete with FSU or European tons that have higher freight and other costs. He estimates that the market is going to need 2-2.5 million tons of UAN imports each year. “Over the past year, typically, the U.S. pricing situation has been such that it discouraged imports relative to other markets and as a result, we saw that import volume off very significantly.” He said import volumes will normalize through the crop year but that they will only come here if they are incited to do so.
July-June fertilizer year imports were off 54 percent, to 1.6 million from 3.49 million st, according to the U.S. Department of Commerce.
Another producer, CF Industries Holdings Inc., actually exported UAN during the last quarter ending June 30. CF Chairman, CEO, and President Stephen Wilson told analysts that clearly the new Trinidad product will move to the U.S, but like Bennett, he agreed that it will likely displace higher-cost product from FSU countries. “Whether that product leaves the market or gets redirected to other markets is yet to be seen,” he said. He said CF didn’t move as much UAN in the spring as expected and that there has been price pressure; however, he is hopeful that corn acreage expectations for 2010 will spur nitrogen demand.