2. 1
A third year of lower grain stocks
Grain production and consumption Days of consumption in stocks
Million tons Days
2 350 85
2 300
80
2 250
75
2 200
2 150 70
2 100
65
2 050
60
2 000
1 950 55
06 07 08 09 10 11E 12F 13F 06 07 08 09 10 11E 12F 13F
Consumption Production
Source: USDA, November 2012
Capital Markets Day 2012 – 4 December
3. 2
Main agricultural commodity
prices at historic high levels
FAO price index
Index
300
250
200
150
100
50
0
1/2004 1/2005 1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012
Cereals Price Index Food Price Index Annual average Food price index
Source: FAO, November 2012
Capital Markets Day 2012 – 4 December
4. 3
Relationship between wheat and urea prices
900
800 May-Sep 08
700
Urea fob Black Sea
600
Apr-May 12
500
400
Feb-Mar 08
300
Oct 12
200
100
100 150 200 250 300 350 400 450 500
Wheat fob US Gulf
Capital Markets Day 2012 – 4 December
5. 4
Main fertilizer commodity prices
USD/mt
900
800
700
600
500
400
300
200
100
0
Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Urea fob Black Sea DAP fob Tampa MOP fob Vancouver
Source: International publications
Capital Markets Day 2012 – 4 December
6. 5
Upgrading margins from ammonia to urea
USD/t
800
700
600
500
400
300
200
100
0
Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12
Urea fob Black Sea 0.6 * Amm + 15
Source: Average of international publications
Capital Markets Day 2012 – 4 December
7. 6
Above trend growth for nitrogen
outside China in 2011
Million tons N
100
95
90
85
80
75
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Trend growth from 2001 to 2011 of 2.1% per year
Source: IFA
Capital Markets Day 2012 – 4 December
8. 7
…of which a major part has come
from high cost regions
Million tons N
4,000
833
-390 -1,165
3,000 584
2,703
High cost 198
503
2,000 392
985
1,000
763
0
Central Ukraine Turkey Russia North Africa West China Rest of Total
Europe America Asia World
Source: IFA Annual statistics
Capital Markets Day 2012 – 4 December
9. 8
Nitrogen production outside China during
1H2012 estimated 1.6% lower than last year
0
-100
-285
-200
Kilotons N
-300
-116
-400
-500 -164
-545
-600
Russia Ukraine Egypt RoW Total
Source: IFA quarterly survey, covering 70-75% of global production
Capital Markets Day 2012 – 4 December
10. 9
Chinese urea production gaining year on year
Chinese urea production Domestic urea balance
Million tons Million tons
7,0 25
22,7
6,0 19,5
8% 19,2
20
17,8 3,5
5,0
1,7
15
4,0
3,0 10
2,0
5
1,0
0,0 0
Domestic
Domestic
Export
Export
Production
Production
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
2012 2010 2011
Source: BOABC Jul-Oct 11/12 Jul-Oct 12/13
Capital Markets Day 2012 – 4 December
11. 10
More urea at lower prices exported from China
Chinese urea exports Chinese export tax 1 Jul – 1 Nov
Kilotons Fob China
8 000 700
2011
7 000 650
6 000 600
5 000 550
4 000 500
2012
3 000 450
2 000 400
1 000 350
0 300
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1 750 1 950 2 150 2 350 2 550
2012 2008 2009 2010 2011 Domestic price ex works, RMB/t
Source: BOABC
Capital Markets Day 2012 – 4 December
12. 11
Lower feedstock cost and lower
domestic urea price in China
Anthracite coal prices, RMB/t Domestic urea price in China
RMB/t
2 500
1,100 -25% 2 400
2 300
825 2 200
2 100
2 000
1 900
1 800
1 700
1 600
Nov 11 Nov 12 Jan Feb Mar Apr May Jun Jul AugSep Oct NovDec
2012 2011
Source: China Fertlizer Market Week
Capital Markets Day 2012 – 4 December
13. 12
Modest nitrogen production increase
in China with urea gaining share
+10%
44.6
40.7 41.8 41.3
40.2 40.0
9.6 8.7 9.1
10.3 10.2
Million tons N
6.7 6.1 5.6
7.5 6.2 +32%
25.5 25.2 26.6
22.9 23.8
2007 2008 2009 2010 2011 2012E
Other ABC Urea
Source: IFA, Chinese statistics
Capital Markets Day 2012 – 4 December
14. 13
Projected nitrogen capacity additions outside
China in line with historical consumption growth
Urea capacity growth relative
Year Driving regions
to nitrogen capacity
World Excluding China World Excluding China
2011 China 36% Pakistan 37% 1.2% (1.3%) 1.2% (1.3%)
Pakistan 24% Iran 18%
2012 China 60% Qatar 34% 3.5% (4.1%) 2.2% (2.1%)
Qatar 14% Vietnam 20%
2013 China 63% Algeria 38% 4.4% (2.7%) 2.6% (3.1%)
Algeria 14% UAE 18%
2014 China 45% Egypt 25% 1.7% (1.0%) 1.5% (1.2%)
Egypt 13% Algeria 16%
2015 China 42% Saudi Arabia 15% 2.6% (1.2%) 2.5% (1.9%)
Saudi Arabia 9% Brazil 14%
Gross annual addition 2011-2015 ~2.0%
Assumed annual closures ~0.5%
Net annual addition 2011-2015 ~1.5%
Trend consumption growth from 2001 2.5% 2.1%
Source: Fertecon urea update October 2012. Consumption data source is IFA. Previous update in brackets.
Capital Markets Day 2012 – 4 December
15. 14
Continued project delays
Additional urea capacity
Million tons
8 7,5
7 Fertecon assumptions:
0,4 1 new site in Egypt from Jul 13
6
5,2 1,2 Startup in UAE in Jan 13
5
4
2,5 Startups in Algeria in Jul 12, Jan 13 and Jul 13
3
2
1 2,5
0
2012 2012 2013
Oct 11 est. Oct 12 est. Oct 12 est.
Source: Fertecon urea updates
Capital Markets Day 2012 – 4 December
16. 15
North America imports one third of
consumption
Million tons of N
7.1 19.8
4.5
1.8
12.7
Domestic production Imports Total consumption
Ammonia Urea UAN
Source: IFA, USTIC
Capital Markets Day 2012 – 4 December
17. 16
Global phosphate rock production
increased by 3.8% in 2011
Mt Rock
200
180
160
140
Excluding China
120
100
80
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Trend growth from 2001 to 2011 of 2.1% per year
Source: IFA
Capital Markets Day 2012 – 4 December
18. 17
Record Chinese phosphate exports in 2011
Million tons P2O5
4,5
4,0
3,5
3,0
2,5
2,0
1,5
1,0
0,5
0,0
2005 2006 2007 2008 2009 2010 2011
DAP MAP TSP Other NP
Source: IFA, BOABC for 2011. ( Assuming 25% P2O5 in “Other NP”, included from 2009 )
Capital Markets Day 2012 – 4 December
19. 18
India plays a major role in phosphate markets
2011 DAP/MAP/TSP imports 2011 phos acid imports 2011 phos Rock imports
12 mt P2O5 4.5 mt P2O5 31.1 mt rock
24%
29%
46% 47%
55%
11%
65% USA
16%
Brazil
7%
Pakistan
India Other
Source: IFA
Capital Markets Day 2012 – 4 December
20. 19
Phosphate trade down 11% second
quarter 2012
2Q2012 compared to 2Q2011
-276
000’ tons of P2O5
-118 153 -181
102
160
-684
India Latin America RoW RoW West Asia USA China
IMPORTS EXPORTS
Source: IFA Quarterly Survey of World Trade, covering approx.95% of world trade (DAP, MAP, TSP and Phos.acid)
Capital Markets Day 2012 – 4 December