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Rising Urea Prices Affect AdBlue
21 July 2008
Urea prices reached record highs in June 2008, increasing the pressure on the AdBlue market’s already tight margins, according to Integer Research’s AdBlue Monitor report.
Given the already competitive nature of the AdBlue market, where the struggle to develop early market share has pushed margins to the absolute limit, there is little producers can do to absorb cost increases given the already tight margins. Additional cost pressures have resulted in a series of price hikes as suppliers look to preserve their profitability. We also understand from our research that producers are now receiving much better returns on urea when it is sold as fertiliser.
Understandably, neither OEMs, nor AdBlue producers want a volatile AdBlue price, a development that would be ill-received by end-users, especially given the current EGR v SCR sales climate in countries where Euro 4 sales make fuel savings less obvious. Across Europe, AdBlue prices have increased by an average of €0.08-0.9/L since January, in response to a doubling of the urea price and surging energy costs. We would expect another AdBlue price increase in Q3 as input costs look set to remain high through 2008.
AdBlue is used as the reductant in a number of selective catalytic reduction (SCR) systems for NOx control.
July 21, 2008 in Brief | Permalink | Comments (4) | TrackBack (0)
Comments
Posted by: wintermane | July 21, 2008 at 05:59 PM
Hey. Give the rest of us a change, huh wintermane ?
Posted by: ToppaTom | July 21, 2008 at 07:47 PM
How much urea is used per gallon of diesel? Is this another nail in diesel's coffin?
Posted by: George | July 21, 2008 at 10:19 PM
"We also understand from our research that producers are now receiving much better returns on urea when it is sold as fertiliser."
Interesting. Wonder what biofuels had(ve) to do with this :-)
@George,
IMO, SCR is currently used mostly in buses/trucks only. Cars probably use some form of EGR (exhaust gas recirculation) to control the flame temperature (and lower NOx emissions). Only recently have SUV diesels with SCR begun to appear in the American market.
[http://www.autobloggreen.com/2008/03/13/mercedes-brings-adblue-to-america-with-three-bluetec-suvs/]
This link gives the average consumption of AdBlue to be 0.1 L/100 km (or ~4.25*10^-4 gal/mile). The link also puts the urea consumption @ 1-3% of the diesel consumption. So, the urea:diesel (volume) ratio is ~0.01.
AdBlue is typically ~33 (w/w?)% urea, so multiply accordingly to get a milligrams urea/gal diesel burnt value.
A word on the input costs:
Urea is made by reacting ammonia and CO2. Ammonia is produced by reacting nitrogen (from air) and hydrogen (from steam cracking of naphtha, a component of crude oil).
In other words, higher crude prices dictate higher urea prices.
Posted by: Pradeep | July 22, 2008 at 12:22 AM
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I guess urine trouble now....
Someone had to say it!