Nutrien Limited's $1.5 Billion in Projects Point to Shifting Fortunes in Global Fertilizer Market

Researched by Industrial Info Resources (Sugar Land, Texas)--Nutrien Limited (NYSE:NTR) (Saskatoon, Saskatchewan), the world's largest producer of potash and third-largest producer of nitrogen fertilizer, is considering a series of expansions, overhauls and closures at units across the U.S. and Canada, in accordance with the changing demand for ammonia and phosphate products. Industrial Info is tracking more than $1.5 billion in active projects involving Nutrien, more than $600 million of which is set to begin construction within the coming year.

Click on the image at right for a graph detailing U.S. and Canadian projects from Nutrien, by state or province.

One of the busiest places in the U.S. for chemicals is the Louisiana Gulf Coast, where Nutrien is proposing a significant expansion to a fertilizer complex in Geismar. The addition would involve constructing a new ammonia synloop unit that would expand the ammonia plant's capacity 4,000 tons per day. The Geismar facility already is preparing for additional storage tanks and gas flares, which are set to wrap up by September. For more information, see Industrial Info's project reports on the synloop expansion and tank additions.

Nutrien also is proposing a series of equipment updates and replacements for ammonia units at fertilizer plants across the U.S. and Canada that would take place in the coming years. Coils, tubes and other essential equipment would be overhauled. Click here for a list.

Nutrien announced in November that it was tempering its outlook for the remainder of 2019, in part due to reduced potash volumes and continued pressure in the fertilizer markets. But executives expect to see stronger demand this year, driven by crop production.

"As we look ahead to 2020, we do see opportunity," said Charles Magro, the chief executive officer of Nutrien, in a quarterly press release. "Corn and soybean fundamentals are improving, leading to a 10% increase in prices from summertime lows. We expect total US acreage to increase by at least 12 million acres in 2020 including 93 million acres to 95 million acres of corn. Based on these acreage changes, we expect US crop input expenditures to increase by around 7% next year."

The company is facing bigger challenges in the phosphate sector, which one executive noted is seeing "structural oversupply." The weakened market could hinder Nutrien's plans for a pair of phosphogypsum units at a phosphate fertilizer plant in Aurora, North Carolina. The "gypstacks" would process wastewater that contains mercury and other contaminants, with drainage systems that would prevent leakage into the ground. For more information, see Industrial Info's project reports on the proposed gypstacks No. 4 and No. 7.

The declining fortunes for phosphate spurred Nutrien to switch production at one of its major Canadian facilities last year. "Phosphate volumes were lower [in 2019] as we completed the conversion of our Redwater phosphate plant to an ammonium sulfate facility in the third quarter," Magro said in November. "This was an excellent strategic decision, given that we generate dramatically higher margins for ammonium sulfate compared to the margins we would have received from producing phosphate product at Redwater with imported rock."

By the end of this year, Nutrien expects it will have closed one gypstack, will be near the closure of another, and will have expanded operations at a third at its phosphate complex in White Springs, Florida, where the company already closed a gypstack in August. The expanded unit will replace the unlined, primarily gravity-drained older units and reduce the amount of process wastewater. Nutrien believes the overhaul also will reduce the likelihood of sinkholes. For more information, see Industrial Info's project reports on the expanding unit and the ones slated to close this year and next year.

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