Argus FMB Cost and Margin Service
This new online service provides decision-makers with a dynamic tool
to assess current and future production costs and netback margins for
ammonia and urea export plants across the globe
Market Reporting
Fertilizer
illuminating the markets
Consulting
Events
Argus FMB Cost and Margin Service
The product
Drawing on its extensive platform of data and expertise across the energy and fertilizer sectors,
Argus is pleased to offer a new online tool for all decision-makers with strategic interest in the
merchant ammonia and urea markets. The Argus FMB Cost and Margin Service provides clients with
a unique and flexible means to assess current and future competitiveness of major international
producers in both markets.
Assessments of current and future costs and margins span 170 individual units across 26 countries.
Sites analysed
The subset chosen represents the crucial group of plants that serve the seaborne export market for
ammonia and urea (plus the Canadian sector serving the US midcontinent), or with the potential for
seaborne exports.
In the case of China, detailed research is conducted by local Argus experts in the company’s
Beijing office into the costs of urea production for 35 units based on anthracite and bituminous coal
gasification and natural gas across various provinces. With China likely to export 11 mn t of urea in
2014, and more in 2015, an assessment of where the floor is for Chinese tonnage today and in the
future is crucial to industry decision-makers and potential investors.
How it works
For each product, two types of cost curves are presented:
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Cumulative production volume by operating cost
Cumulative net export availability by cost to fob
Operating costs are presented in a number of formats with client-interactive options to view content.
Users can choose to view all sites or select the year, particular regions or countries to include on the
curve.
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Argus FMB Cost and Margin Service
Viewing options include total operating costs and their summary components, namely feedstock
costs, other variable costs and fixed costs.
The net export cost curve adds two further
key elements:
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•
transportation/handling costs to fob
export taxes where appropriate
(notably China)
Cost curves are available for each year from 2014 through to 2028. This allows users to compare
cost curves across different years. Given recent oil price reductions, this tool is of particular use for
assessing the shifting position of swing players, such as Ukraine, which face gas feedstock costs
directly indexed to oil prices.
After building a curve, the user can download it as a JPEG file or export the underlying data into Excel
using the CSV button.
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Argus FMB Cost and Margin Service
Margin output
A unique assessment is provided of key producer margins, both current and future. These are
calculated as the difference between the Argus FMB forecast fob price for each site and the total
cost to fob.
The Argus FMB Cost and Margin Service
provides an important tool to assess the
likely competitive pressures that different
producers will face over time. These
pressures are likely to be significant in
the next five years as new nitrogen
capacity comes on stream in the US
based on low-cost gas arising from the
country’s shale oil/gas revolution.
Why Argus FMB
Cost Curves?
Argus FMB’s extensive research history and feedstock expertise allows analysis down to site level
and a high level of price granularity taking into account:
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Feedstock prices
Electricity
Water
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Catalysts and chemicals
Labour
Maintenance
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Export taxes
Transportation costs
Argus FMB employs 47 dedicated personnel who liaise with the market every day to compile unique
insights on freight, global markets, feedstocks and fundamentals. Experts in key locations, such as
Russia and China, offer unique transportation data.
Updated every six months, the ammonia and urea cost assessments are calculated following a market
appropriate methodology, which is accessible at argusmedia.com/methodology.
Argus FMB is an extension of your company’s analysis team. Users can validate internal curves against
ours and talk to our consultants to understand any differing opinions.
For a demonstration of the Argus FMB Cost and Margin Service, contact us at
[email protected]
About Argus
Consulting
Services
Through the acquisition of FCC, Argus Consulting Services has over 30 years of experience in
fertilizers and chemicals, providing effective consultancy services for producers, buyers, investors,
banks, governments and multilateral agencies.
Argus Consulting Services provides clients with tailored research, data, benchmarking, modelling,
strategic analysis and decision-making support. The focus is firmly on markets – their structure,
outlook, logistics and economics, where Argus’ understanding, knowledge and insight provide
clients with a clear competitive advantage.
Argus is the leading independent energy and commodity price reporting and news analysis agency.
Argus uses a precise and transparent methodology to assess spot and forward prices in the oil,
petroleum products, LPG, petrochemicals, bioenergy, electricity, natural gas, coal, emissions,
transportation, metals and fertilizer markets. Argus prices are used by market participants as
indexes in physical contracts and as benchmarks for derivatives trading, settlement and clearing.
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Tel: +44 20 7780 4200 | Web: argusmedia.com | Email: [email protected]
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