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.