Ammonia cash cost build-up

  USD/mmbtu
x mmbtu/mt NH3
= USD/mt NH3
+ USD/mt NH3
= USD/mt NH3
US Gulf ex works
36 mmbtu natural gas/tonne ammonia
Ammonia (NH3)
82% N
Typical natural gas consumption for ammonia production

Source: Blue Johnson & Associates

Granular urea cash cost build-up

  USD/mt NH3
x NH3/mt gr urea
= USD/mt gr urea
+ USD/mt gr urea
+ USD/mt gr urea
= USD/mt gr urea
US Gulf ex works

* Process gas cost linked to natural gas price, 5.2 mmbtu gas per 1 mt urea.

36 mmbtu natural gas/tonne ammonia
Ammonia (NH3)
82% N
0.58 ammonia per tonne urea
Urea
46% N
CO2

Source: Blue Johnson & Associates

The urea price, adjusted for the relative nitrogen content, must reflect a sufficient margin above the ammonia price to cover the cash cost of upgrading the ammonia. If not the fertilizer producer has an economic incentive to sell the ammonia instead of producing urea.
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