Acron’s nitrogen fertilizer output increases 11% from 2017-2018; further gains expected

Acron, one of Russia’s largest fertilizer producers in Russia and the world, posted full-year 2018 production results showing an 11% increase year on year of combined nitrogen fertilizers to 4.24m. tonnes. This despite in-house consumption declining 14% to 958,000t. As a result, volumes available for sale increased by 22% to 3.28m.

Urea production increased 15% year on year to 1.02m. tonnes while in-house consumption also increased, up 40%, to 602,000t. Due to the rate of the in-house consumption increase, available urea for domestic and international markets declined by 9% to 413,000t. Production is expected to be higher in 2019 as new capacity came on stream in the second half of 2018, Acron’s sixth urea unit.

Ammonium nitrate remained the single biggest product by volume. However, contrary to the overall increases in production, AN production declined by 9% over the same period to 1.80m. tonnes. Meanwhile, in-house consumption nearly halved to 355,000t and led to 2018 supply increasing by 12% to 1.44m. tonnes. Extra availability came as Ukraine banned Russian AN and steep anti-dumping tariffs in the EU blocked out Russian AN for much of the year.

Elsewhere, UAN production increased by 50% in 2018 year on year to a record 1.42m. tonnes while ammonia output remained stable at 2.62m. tonnes. Additions to current ammonia capacity will increase output by more than 20%.

Changes to the production volume tally with the increases or decreases to the average price of nitrogen fertilizer in 2018. Acron’s average indicative price for UAN in 2018 was $179pt fob Baltic, up 23% year on year. Urea prices were also higher, up 15% to $251pt fob as were ammonia prices, up 8% to $288pt fob. However, ammonium nitrate prices declined by 2% over the same period to $188pt fob.

The higher prices, bar the Russian AN fob price, reflect firmer international markets in 2018 versus 2017 with the average urea price internationally 15-20% higher. Indeed, the Profercy World Nitrogen Index, a basket of the key global price points across all the main nitrogen products, was 16.24 points or 14% higher in 2018 year on year at 129.88 points.

By Michael Samueli, Nitrogen Market Reporter

E: michael.samueli@profercy.com