Chinese Earthquake hits urea production---part of the reason why AdBlue prices going up. Biglorryblog has the story from Greenchem

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If it isn't the price of diesel--it's the price of AdBlue says Biglorryblog. And for all those hard-pressed operators who opted for SCR on their Euro-4 and Euro-5 trucks this bit of news will be as welcome as flatulence in a space suit. GreenChem, Europe's leading supplier of AdBlue, is predicting a further increase in the price of the stuff. Apparently "...this follows a sharp increase in the price of urea which will affect all suppliers of AdBlue." 

GreenChem's founding chairman Teun de Bruijn tells BLB:  "The price of our basic raw material has climbed steeply in recent weeks and we - and other suppliers - will have no alternative to passing the increase on to our customers." However, the GOOD news is that de Bruijn reckons: "The increase in AdBlue pricing will be much lower than fleet operators are facing for their diesel fuel---so the impact on operating costs will be very low..." Well that's a relief anyway.

 

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Meanwhile, de Bruijn forecasts that while AdBlue prices go up in the next few months,"...operators who shop around in the next few days may be able to obtain supplies at a lower price."  So BLB's advice is to get dialling your supplier ASAP.

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According to the experts the cost of urea has already risen by almost 50% since the beginning of 2008. Why? Well it seems there's a whole raft of reasons but amongst them is the fact that a key element in the production of urea (the stuff that's the main constituent of AdBlue) is natural gas---and as we all know gas prices have been rising for several years, in line with oil. Only now there has been a further and significant increase on top of the earlier increases. Secondly, GreenChem reckons "Urea prices have also been impacted by two other factors: the increasing demand for food production worldwide but particularly in China (where urea is a core ingredient of many fertilisers) and, ironically, the growing popularity for bio-diesel which also relies on urea as a key component. "

 

Now click through here to find out more..and BLB's take on the whole subject.

Moreover, it seems that: "The overall urea price increase since the beginning of 2008 was already enough reason to justify a rise of approximately 3 Euro cents (about 2.5p) per litre of AdBlue on top of the price increase announced by GreenChem in January. " Now GreenChem warns: "Another incident causes even more uncertainty: the devastating earthquake in China which has cut urea production capacity there by around 4 million tonnes. China will have to seek even more supply from abroad and it is unclear what this will mean for urea prices, although it must be expected that they will rise further, with a direct effect on AdBlue prices."

 

 

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Of course there must be some manufacturers...namely, Scania and MAN who will no doubt greet this bit of information with a hardly-supressed cry of glee--well at least as far as their EGR in-line six engines are concerned although both still need SCR or their mighty V8s...

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But it does beg the question. If prices for AdBlue and, more importantly, diesel continue to rise---at what point will the cost of AdBlue, outweigh any fuel economy gains created by running an engine with SCR...? No doubt we're a long way off that point yet---but still, it's a point to ponder. Perhaps GreenChem would like to post a comment back to BLB? And meanwhile, if you hear the sound of champagne glasses clinking, it will probably be from the EGR camp!

Of course the EGR party won't last for ever as various pundits and truck manufacturers are already predicting that for Euro-6 engine makers will need both EGR AND SCR...so Biglorryblog's message for EGR truck manufacturers and operators alike is, smart move guys, just enjoy it while you can.... 

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Which makes it even more surprising that MAN still hasn't launched - sorry - made its Euro V EGR engine available to truck operators. Surely having a non-additive derived engine that also takes advantage of MAUT and other savings would be a huge competitive advantage.

Or maybe there's some rather bad news waiting in the wings reference fuel consumption, EGR and Euro V.

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This page contains a single entry by BigLorryBlog published on May 25, 2008 3:51 PM.

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