Urea Fertilizer

Urea was discovered in 1773 by the French chemist Hilaire Rouelle. In 1828, German chemist Friedrich was obtained by reacting silver isocyanate with ammonium chloride. This was the first time an organic compound was obtained artificially from an organic compound.

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Nitrogen is one of the most important nutrient requirements for plants and common types of chemical fertilizers. Farmers use N fertilizers to accelerate the growth and increase the yield of their agricultural products. The main common types of nitrogen fertilizers are Urea fertilizer and ammonium nitrate.

Urea is nitrogen fertilizer with an NPK (nitrogen-phosphorus-potassium) ratio of 46-0-0. The chemical formula of the urea is close in composition to the organic formulation of the urea, which also provides a number of advantages in the mass use for feeding crops. Although urea is naturally produced in humans and animals, synthetic urea is manufactured with anhydrous ammonia.

Other names of urea fertilizer: Amide of carbonic acid, carbamide, carbamide acid, carbonyl diamide, carbonyl diamide, carbonyl diamine, isaure

Emerging Trends and Market Shifts

In the past week, a significant development has been Google-indexed revealing that the demand for urea in the agricultural sector is on the rise due to the increased focus on sustainable farming practices and the need for high crop yields. Recent data suggests that the urea market is experiencing substantial growth, with Russia, Saudi Arabia, and Indonesia stepping up as key players in the market due to reduced production from China.

Another trend that has surfaced is the increased scrutiny on the environmental impact of urea production and usage. There are ongoing efforts to find more eco-friendly alternatives or methods to reduce the carbon footprint associated with urea manufacturing. This shift is being driven by global environmental regulations and the increasing cost of traditional production methods.

State Change — Prilled Urea Versus Liquid Urea

For high-quality DEF intended for use in an SCR diesel system, the urea is ultimately going to have to be solutionized into a liquid form from a solid prill or granular state. Prill or granular urea is a small aggregate that often comes in the form of a dry sphere or oval shape. It is urea that has been dehydrated and pelletized from a melted liquid and is easier and more cost-effective to transport due to the elimination of water weight. Prilled urea is often the form of lower urea concentrations found in nitrogen-rich fertilizers. Higher-quality DEF-grade prilled urea is a low biuret, low aldehyde micro-prill that meets specific ISO 22241 specifications for the production of DEF.

When shipping a dry product, your cost will be less. When shipping a product in liquid form, your cost will be higher because the product is heavier. Some costs will also be offset by the manufacturer being able to blend down a 50% urea concentrate to the 32.5% required for DEF.

Want more information on prilled urea prices? Feel free to contact us.

How Form Changes Cost

In general, prilled urea versus liquid urea is going to be more cost-effective since in the solid form you have eliminated the cost of excessive water weight. Liquid urea costs more to transport because of that reason, but even in prill form, it currently costs a significant amount to transport when you consider that the United States’ primary importer of urea is China. Due to the rising cost of sea transportation and our current trade climate with the Chinese government with 10%+ tariffs on all urea imports, the cost has gone up dramatically in the past year. The fact that China has greatly reduced its urea manufacture, coupled with the Paris Climate Accord has also greatly reduced the availability of urea as a commodity, making prices go up and creating a market environment of high demand and scarcity.

An Ideal Market for US Urea and DEF Manufacture

Ideally, ongoing negotiations between China and the US would lead to the lifting of the 10%+ tariff on urea, allowing for greater importation to satisfy urea and DEF needs for the US west coast producers, blenders, and solutionizers. However, with no clear resolution in sight, other countries such as Russia, Saudi Arabia, and Indonesia are capitalizing on the situation to dominate the market. Reports indicate that Russia has drastically increased its price per metric ton due to the heightened demand.

Santich from Top!Blue noted, "Russia is coming on strong, very much capitalizing on the situation with China and the global demand for urea. Prior to the deficit, Russia was selling urea at roughly $200 per metric ton and now they're selling it at roughly $500 per metric ton. They are definitely making a lot of money in this arena."

The Bottom Line

Santich emphasizes, "It is tough to say whether prilled urea versus liquid is a more cost-effective option for DEF manufacturers and distributors because the metrics that go into making that conclusion are all over the place. In the end, a preference over prilled urea versus liquid all comes down to supply, tariffs, and the cost of shipping." As other countries come online with urea production and DEF manufacture, the US may see relief in price by the end of the year. This, however, is dependent upon the quality of their product and how long their learning curve is to produce DEF-grade urea that meets necessary ISO 22241 specifications. Cheaper does not always equal sufficient quality. Buying less expensive urea may cause problems in your SCR system. Low-quality urea has a higher value of aldehyde and is not as free-flowing. It requires anti-caking additives, which can be gummy, sticking to the inside of your SCR. This low-quality urea can leave a residual film that will impact the life of your system, so prioritizing higher quality is always best. Says Santich, "These new countries don't have the expertise to produce Top!Blue quality. They're taking agricultural urea and trying to make it fit DEF grade because it commands a higher price. Their facilities are not built for it, but they're trying to see if they can fill that niche. That's where you get cheap prices, and the end user ultimately pays the price. The allure of cheap prices is quickly diminished by replacing an SCR system, taking its lifespan from 10-12 years down to 5-6 years and costing $13-$15k for replacement."

Contact an SCL Consultant Today

In a wide range of industrial sectors, SCL is committed to being the number one logistics and solutions provider for the products that protect and optimize the machines that keep our country moving. We pride ourselves on remaining at the forefront of industry trends and technological innovations, and as the market continues to evolve, we are committed to providing extensive product and industry knowledge and total performance satisfaction for our customers. For information on how we can assist your fleet in choosing the optimal products at a competitive price, contact an SCL consultant today.

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