NITROGEN (FIXED)--AMMONIA (Data in thousand metric tons of nitrogen, unless noted) Domestic Production and Use: U.S. ammonia producers operated at near 100% of capacity under prevailing conditions of supply-demand balance, firm prices for nitrogen compounds in all forms, and favorable profit margins. Domestic ammonia was valued at about $4 billion, f.o.b. barge, New Orleans. Sixty percent of total U.S. ammonia production capacity was concentrated in the States of Louisiana, 40%; Oklahoma, 14%; and Texas, 6%; owing to large indigenous reserves of natural gas feedstock. Ammonia plants in the Midwest accounted for another 16% of capacity, with the remainder equally divided between the Southern, Southeastern, and Western States. Downstream nitrogen compound operating rates ranged from 90% to more than 100%. Urea producers operated at 104% of design capacity, compared with 89% in 1994, while diammonium phosphate and monoammonium phosphate (DAP and MAP) rates improved to 95% from 91% in 1994. Approximately 80% of U.S. apparent domestic ammonia consumption was for fertilizer use, including anhydrous ammonia for direct application, urea, ammonium nitrate, ammonium phosphates, and other nitrogen compounds. Ammonia was also used to produce plastics, synthetic fibers, and resins, 10%; explosives, 4%; and numerous other chemicals, 6%. Salient Statistics--United States:1/ 1991 1992 1993 1994 1995e/ Production2/ 12,800 13,400 12,600 13,400 13,200 Imports for consumption 2,740 2,690 2,660 3,450 3,600 Exports 580 354 378 215 200 Consumption, apparent 14,800 15,600 15,100 16,500 16,600 Stocks, producer, yearend 936 1,060 852 956 1,000 Price, dollars per ton, average annual, f.o.b. gulf coast3/ 117 106 121 211 230 Employment, plant 2,500 2,500 2,500 2,500 2,500 Net import reliance4/ as a percent of apparent consumption 14 14 17 19 20 Recycling: None. Import Sources (1991-94): Trinidad and Tobago, 32%; Canada, 29%; Former Soviet Union, 21%; Mexico, 12%; and other, 6%. Tariff: Item Number Most favored nation (MFN) Non-MFN5/ 12/31/95 12/31/95 Ammonia, anhydrous 2814.10.0000 Free Free. Ammonia, aqueous 2814.20.0000 Free Free. Depletion Allowance: Not applicable. Government Stockpile: None. Prepared by Nitrogen Specialist, (703) 648-7711. NITROGEN (FIXED)--AMMONIA Events, Trends, and Issues: The U.S. fertilizer industry experienced one of its best years in history, bolstered by global supply-demand balance and solid export demand for domestic fertilizers and grain. Prices for most nitrogen commodities were at 20-year highs, operating costs were down, and profit margins up. Ammonium phosphate exports to China, India, and other ports of call continued to soar. The favorable situation and projected outlook precipitated the announcement of a new round of capacity expansion by the U.S. nitrogen fertilizer industry, including the construction of new capacity and debottlenecking activities in the United States, Canada, and Trinidad and Tobago. Canadian producers also planned to reactivate several idle ammonia plants, and debottleneck existing capacity. U.S. ammonia import tonnage continued at record levels, led by Trinidad and Tobago, the Former Soviet Union, Canada, and Mexico, in order of importance. A dramatic 100% increase in shipments from the Black Sea Port of Yuzhny, Ukraine, to more than 1 million product tons, was largely offset by a decline in Mexican and Persian Gulf shipments. The U.S. urea trade deficit was projected to fall marginally to 1.8 million tons of product from 2.2 million tons in 1994. Although domestic feedgrain acreage fell 9%, and foodgrains, 2%, from 1994 levels, overall crop acreage declined only 2% owing to a rebound in oilseeds and cotton. A wet spring hampered fertilizer application and lowered yields. The outlook for 1996 was optimistic, in light of prospects for improved domestic fertilizer demand and a continuation of firm market conditions for fertilizers and grains at the global level. Because readily available nitrogen compounds can be formulated into explosives such as those used to destroy the federal building in Oklahoma City, OK, in April 1995, the U.S. Congress, federal law enforcement and other Government agencies, and the private sector were working cooperatively to implement measures to counteract terroristic activities. World Ammonia Production, Reserves, and Reserve Base: Plant production Reserves and reserve base6/ 1994 1995e/ United States 13,400 13,200 Available atmospheric nitrogen Canada 3,470 3,700 and sources of natural gas for China 19,800 20,200 production of ammonia are Germany 2,130 2,600 considered adequate for all India 7,330 7,900 listed countries. Indonesia 3,010 3,200 Japan 1,430 1,450 Mexico 2,030 2,000 Netherlands 2,370 2,400 Russia 7,260 7,800 Trinidad and Tobago 1,650 1,700 Ukraine 3,000 3,500 Other countries 25,100 26,000 World total (rounded) 92,000 96,000 World Resources: The availability of nitrogen from the atmosphere for fixed nitrogen production is unlimited. Mineralized occurrences of sodium and potassium nitrates, found in the Atacama Desert of Chile, contribute minimally to global nitrogen demand. Substitutes: Nitrogen is an essential plant nutrient that has no substitute. Also, there are no known practical substitutes for nitrogen explosives and blasting agents. e/Estimated. 1/U.S. Department of Commerce (DOC) data unless otherwise noted. 2/Annual and preliminary data as reported in Bulletins MA28B and MQ28B (DOC). 3/Source: Green Markets Fertilizer Intelligence Weekly, a Pike and Fischer publication. 4/Defined as imports - exports + adjustments for Government and industry stock changes. 5/See Appendix B. 6/See Appendix C for definitions. Mineral Commodity Summaries, January 1996