April showers bring\u2026higher diesel exhaust fluid (DEF) prices? An early end to winter across much of North America has driven up agricultural demand for urea \u2013 the key ingredient in DEF \u2013 and in many cases has translated into higher DEF prices.<\/p>\n
\u201cAn early planting season in some areas of North America has really put a strain on urea suppliers and therefore has pushed prices up quite considerably,\u201d said Monica Bianchi Baker, senior analyst with Integer monitors the fluid\u2019s prices around the world. \u201cThe fertilizer business is a highly seasonal business, but the season came earlier than planned so the upward pressure on urea pricing has been very strong.\u201d<\/p>\n
About 88% of the urea produced globally is used as fertilizer, with the remaining 12% divided among industrial uses including the production of DEF. Only high-grade urea can be used in the production of DEF, which means not all urea suppliers can meet the demands of DEF producers.<\/p>\n
Industrial urea consumers typically take into account the agricultural demand cycles <\/a>for urea when sourcing product but those expectations went out the window with this spring\u2019s early planting season.<\/p>\n \u201cNormally, industrial users look at the seasonality of the agricultural industry to understand where they could see some pressure on prices during the year, but this year because there\u2019s been a mild end to the winter and an early planting season, the pressure on urea itself has been quite exceptional,\u201d Bianchi Baker explained. \u201cFrom February onwards we\u2019ve seen prices escalating.\u201d<\/p>\n That hasn\u2019t gone unnoticed by fleets that consume large amounts of the fluid. Rob Penner, executive vice-president and chief operating officer with Bison Transport, said his company is keeping a close eye on the cost of urea and DEF.<\/p>\n \u201cWe\u2019re certainly seeing that urea prices have skyrocketed,\u201d Penner told Trucknews.com. \u201cDEF has lagged a bit but we\u2019re starting to see that come up pretty aggressively to the tune of 10 cents per litre. Given DEF is 2-3% of our actual fuel consumption, it\u2019s certainly significant to see that cost rise so fast.\u201d<\/p>\n http:\/\/rightnowloads.com\/<\/a> \u201cThe next planting season in some parts of the US will get underway soon, so we don\u2019t expect prices to crash,\u201d she said.<\/p>\n The fierce competition for urea has translated into higher prices and in turn, has affected DEF prices in the US and Canada, Bianchi Baker explained. Urea makes up 32.5% of diesel exhaust fluid.<\/p>\n \u201cWhat we have noticed is that in April and May, DEF suppliers have tabled some pretty hefty price increases, which to our knowledge have filtered through to the end users,\u201d she said.<\/p>\n Chris Goodfellow, emissions analyst with Integer Research and editor of DEF News, said price increases generally ranged from 15 to 21 cents per gallon but in Canada, he said, the cost increases were \u201cslightly lower\u201d and with \u201cless uniformity\u201d than in the US.<\/p>\n
\nPrices appear to be softening now, but Bianchi Baker said another high-demand period is about to begin and so any pricing relief could be short-lived.<\/p>\n