U.S. Ag Chemical Producers Mostly Upbeat, Wary of Tariffs

Researched by Industrial Info Resources (Sugar Land, Texas)--Developers in the U.S. agricultural chemical sector are trying to ascertain the potential impact of U.S. President Donald Trump's tariffs as they prepare for third-quarter project kickoffs, especially as many of these developers rely on imports of major ingredients for fertilizer and other products, such as nitrogen, potassium and phosphorus. Industrial Info is tracking nearly $1 billion worth of ag chemical projects across the U.S. that are set to begin construction in the third quarter, virtually all of which is related to fertilizer development.

Click on the image at right for a graph detailing the top 10 parent companies for U.S.-based ag chemical project kickoffs from July through September.

Nutrien Limited (Saskatoon, Saskatchewan), which is one of the world's largest producers of nitrogenous fertilizers, is preparing for a single project that accounts for more than half of the third quarter's total investment: an expansion of its fertilizer plant in Lima, Ohio, which is designed to boost capacity at a urea-synthesis unit from 1,900 to 2,800 tons per day of urea. Much of the product will go toward the development of urea ammonium nitrate (UAN), which is a liquid nitrogen fertilizer blended from urea and ammonium nitrate.

Nutrien also plans to increase output at the Lima plant's UAN unit from 680 to 2,000 tons per day, and it is preparing to install a new evaporator that will elevate the nitrogen content in its UAN from 28% to 32%. The expansion is expected to run through the end of 2026. Subscribers to Industrial Info's Global Market Intelligence (GMI) Chemical Processing Project and Plant databases can learn more from a detailed project report and plant profile.

At its 400 million-pound-per-year ammonia plant in Borger, Texas, Nutrien is preparing for a pair of upgrades during an upcoming maintenance turnaround: a reformer reharp, which includes replacing the reformer header, and a converter replacement. Subscribers can learn more from a detailed plant profile and reports on the reharp and converter projects.

In a recent quarterly earnings-related conference call, Nutrien executives said some of the price increases for urea and UAN could be attributed to reciprocal tariffs from countries that were affected by Trump's 10% baseline tariff in April. "I have no answer on the tariffs and how long they might be around, but we're going to start to see pricing move up on the generics--and we're already starting to see that from the generic suppliers today," said Jeff Tarsi, the senior vice president for North American retail. "That could slow some of the flow of generics, particularly into the North American market."

However, Tarsi said the way Nutrien's handles the development of its proprietary products so far has been a "great offset" to the effects of tariffs. "We were in a very good position coming into this year, in that we had already secured our inventory, so we're not tariff-affected on the majority of that volume." Tarsi also said the company is not seeing a direct impact from tariffs in the nitrogen supply to its U.S. facilities.

Executives at CF Industries Holdings Incorporated (Deerfield, Illinois) pointed to a total lack of tariffs on U.S. imports of Russian fertilizer. Bert Frost, the chief operating officer of CF Industries, noted in a recent earnings call that Russia is the largest exporter of UAN and urea to the U.S., including almost 1.5 million tons for CF Industries. But he added that the remainder of the company's 4 million to 5 million tons per year of imports comes from nations facing the baseline tariff: "Basically, the Middle East and North Africa--Qatar at 10%; Algeria at 30%; Nigeria at 14%; and Oman, the UAE and Egypt, all at 10%."

While CF Industries, like Nutrien, is facing a limited direct impact from Trump's tariffs, analysts like Oppenheimer & Company say the indirect impacts on such companies are difficult to gauge. CF Industries is preparing for a reformer reharp at its fertilizer plant in Claremore, Oklahoma, where it plans to replace coils, tubes and other components on a 1,000-ton-per-day ammonia unit. Subscribers can learn more from a detailed project report and plant profile.

Subscribers to Industrial Info's GMI Project and Plant databases can click here for a full list of detailed reports for projects mentioned in this article, and click here for a full list of related plant profiles.

Subscribers can click here for a full list of ag chemical projects across the U.S. that are set to begin construction in the third quarter.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).