The US Geological Survey (USGS) has just published the 2014 edition of its Mineral Yearbook: Nitrogen, which is, in my opinion, the best source of basic statistics for the national and global ammonia industry.
I’ve incorporated this new data in an update to my Salient Ammonia Statistics, which is an excel spreadsheet, available to download. It compiles data from over 60 USGS PDFs into one document, adjusted for changing methodologies and unit conversions. The unbroken US ammonia production dataset now spans from 1958 to 2014 (other data points span the same period, others are partial datasets, depending on what USGS reported in various generations of the Mineral Yearbook).
While the Yearbook will always suffer from an information lag – no, the CHS greenfield didn’t happen – it is a long data series, with rigorous methodologies. For my thoughts on the value of its statistics, and the particular importance of being able to ascertain a capacity utilization rate, see my earlier post, What Does Capacity Mean?
The spreadsheet allows us to present a chart like this – although a simpler one might be preferable.
Of note, especially given the inclusion of 2014 data:
- The data is just beginning to show the upwards movement of the capacity expansion taking place in the US since 2012, when natural gas became so cheap. (In two years time, an updated version of this chart will show US capacity at levels not seen since the 1990s).
- The actual capacity utilization rate (thick black line) that USGS specifies seems to have completely flattened over the last four years, at precisely 80%. This seems implausible, and I question the data.
- Life isn’t smooth, and those jagged capacity utilization rates from the previous 15 years seem a more likely future scenario.
For what it’s worth, the 3Q 2016 earnings reports I’m reading suggest producers are pushing their plants to produce as much as possible – I’m seeing record levels of production from ancient assets, and capacity utilization rates of 102% for the quarter. That isn’t a supply-side solution to the current nitrogen prices – unless it’s an OPEC-style plan to scupper any more new builds from being seen as economically viable.