Capacity utilisation rate

The capacity utilisation rate denotes the ratio between effective production and the maximum rated capacity of an industrial unit, expressed as a percentage. In the fertiliser industry, this indicator strongly influences nitrogen product prices such as prilled urea: when demand is weak, the market becomes "supply-led" and prices settle at the floor set by regions with the highest input costs; conversely, robust demand produces a "demand-pull" market, with prices exceeding this threshold for marginal producers^[1]. The supply-demand balance and capacity utilisation rate thus serve as decisive factors in setting urea and other nitrogen fertiliser prices^[1]. The IFA distinguishes "capability" — which incorporates typical maximum utilisation rates — from gross nameplate capacity when drawing up its regional and global projections^[2].