U.S. Chemical Investments Shift Amid Fertilizer Crisis

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Written by Will Ploch, Assistant Editor-in-Chief for IIR News Intelligence (Sugar Land, Texas)

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Summary

While U.S. petrochemical producers are suffering a hangover after years of indulging in capacity expansions, fertilizer producers are rushing to respond to a global demand surge amid the U.S.-Iranian war.

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Fertilizer Tops Demand--By Far

How is the demand outlook for the U.S. Chemical Processing Industry? Depends on who you ask. While agricultural producers are clamoring for fertilizer amid a global crisis, domestic petrochemical producers are realizing they may have put too much on the market.

According to Industrial Info Resources data, more than $30 billion worth of projects in the U.S. Chemical Processing Industry could begin construction before the end of the year; nearly $9 billion of this total is attributed to projects Industrial Info Resources rates as highly likely (81% or more) to kick off as currently scheduled.

Agricultural chemicals account for more investment in chemical-project kickoffs for the remainder of the year than any other sector, with one major factor driving the recent increase in demand: The U.S.-Iranian conflict, which has halted exports has tied up activity in and around the Strait of Hormuz, through which roughly 30% of the global fertilizer trade passes. This has spurred sharp price increases for nitrogen, urea, ammonia and other fertilizer components.

The rising costs of fuel also are hitting farmers, who depend on diesel to run much of their equipment. And all this comes amid the spring planting season, when they spend the most on fertilizer and fuel.

Cronus Chemicals LLC, which is primarily owned by Keyman-Avunduk Investment Company AG, is preparing to begin construction on a fertilizer plant in Tuscola, Illinois. The facility is designed to produce about 860,000 metric tons per year of ammonia, the bulk of which will go toward urea production. The project moved forward last year after the Illinois Department of Commerce and Economic Opportunity granted it a tax credit from its Economic Development for a Growing Economy (EDGE) program.

"This ammonia production includes carbon capture and storage (CCS) to trap and store up to 90% of carbon dioxide (CO2), instead of releasing it, reducing carbon emissions," Illinois Gov. J.B. Pritzker's office said in a press release. "The facility will also provide locally produced fertilizers to Midwestern farmers." For more information, Industrial Info Resources Global Market Intelligence (GMI) Chemical Processing Project Database offers details--including key components, investment values and necessary equipment--in a project report.

Other fertilizer-related projects set to kick off before the end of the year include:

• Phibro LLC's restart of its ammonia plant in West Terre Haute, Indiana, which also has CCS capabilities; Philbro is a subsidiary of Energy Arbitrage Partners. See project report.
• Shomax Energy US' ammonia plant in Wichita Falls, Texas, which is designed to draw most of its energy from solar power; see project report.
• Nebraskaland Aviation's expansion of its fertilizer plant in Holdrege, Nebraska; see project report.

Even if the U.S.-Iranian conflict were to be resolved in the near future, the Strait of Hormuz likely would not be fully operational until months later. Last week, the Federal Reserve Bank of Dallas released a survey of about 100 oil and gas executives, of which more than 75% said they do not expect the Strait of Hormuz will reopen before August.

By the Numbers

• More than $30 billion: Total value of projects in the U.S. Chemical Processing Industry that could kick off before the end of 2026.
• About 30%: Share of the global fertilizer trade that passes through the Strait of Hormuz
• 4,500: Number of jobs Dow plans to slash following a significantly weakened outlook

Too Much Petrochemical, Too Little Demand

Other parts of the U.S. Chemical Processing Industry are facing different challenges. The petrochemical sector is "burdened by persistent oversupply and underwhelming demand growth," according to a recent report from Wood Mackenzie, particularly for ethylene and its derivatives. This follows years of massive capacity buildouts, particularly along the Texas and Louisiana Gulf Coast.

One major player in the industry made headlines earlier this year as it planned to trim its sails: Dow Incorporated, which is shedding about 4,500 jobs and "streamlining" its operations amid a suddenly grim outlook. For more information, February 2, 2026, article - Dow Announces Major Restructuring Plan.

Dow has planned only a handful of U.S.-based expansions, one of which is at its silicone plant in Midland, Michigan. Domestic silicone producers have tightened production following years of oversupply, giving Dow room to purse this relatively small investment. More information can be found in a detailed project report.

Despite the broad downturn in petrochemical fortunes, construction on some capacity expansions is set to begin in the coming months. Shintech Louisiana LLC, a subsidiary of Shin-Etsu Chemical Company Limited, likely will begin work on its PEP-2 Unit at its complex in Plaquemine, Louisiana, which is designed to produce 625,000 metric tons per year of ethylene. The product is expected to be used in the production of polyvinyl chloride (PVC). More information can be found in a detailed project report.

The Industrial Info Resources GMI Project and Plant databases offer a full list of detailed reports for projects mentioned in this article, and a full list of related plant profiles.

Industrial Info Resources also offers a full list of reports for projects in the U.S. Chemical Processing Industry that could begin construction before the end of the year.

Key Takeaways

• The rising costs of fertilizer and fuel are hitting U.S. farmers hard, and producers are scrambling to respond.
• The U.S. petrochemical sector, on the other hand, is facing oversupply and is cutting back on its capacity.
• Chaos caused by the Strait of Hormuz' closure is not likely to be resolved soon.

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About Industrial Info Resources
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) helps companies identify and pursue trends across multiple markets with access to real, qualified, and verified plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).