Mopco urea plant may be shut until after elections – marketer

17 November 2011 13:15  [Source: ICIS news]

LONDON (ICIS)--Mopco’s 660,000 tonne/year granular urea plant in Damietta, Egypt, may remain shut down until after Egypt’s parliamentary elections in late November, a marketer said on Thursday.

The government did not force the shutdown of the plant, but issued a “strong recommendation” that it remain shut until environmental protests are over and Damietta port is reopened, said a source within the company. Mopco’s plant and the port have been closed since 13 November, with no official indication of when they might return to normal operations.

The plant and port are expected to remain closed while the government deals with the protests and attempts to keep the peace ahead of  the elections.

“Every day of shutdown is one day of delay,” said a source close to the expansion projects that are set to create two new units each producing 660,000 tonnes/year of granular urea. The first plant was expected on line in the first quarter of 2012.

Still, there is some optimism from other producers. Marketers at Egypt's Helwan Fertilizers Company, which has a capacity of 660,000 tonnes/year of granular urea, believe Damietta port may reopen within days and have not begun moving export quantities to other ports, though the company has delayed issuing a purchase tender.

Orascom Construction Industries, which markets product from Egyptian Fertilizers Company, which has a capacity of 1.3m tonnes/year of granular urea and supplies large quantities to Europe, has begun moving export availability to other ports, mainly Adabiya and Sokhna.

The effect on prices for Egyptian granular urea has been minimal. It seemed the paper markets suffered an initial psychological effect. The last business done out of Egypt was Mopco’s sales tender for 25,000 tonnes last week, which was awarded to US-headquartered Transammonia.

While some traders expect the limited export availability and delayed shipments to increase prices out of Egypt, it will be difficult for end-markets, including Europe, to accept higher prices in light of ongoing currency woes.

“It’s very politically motivated, these protests,” said a trader. “My reading is that we haven’t seen this news on CNN and CBS, so, to me, it’s a very local problem. It’s an Egyptian problem at an Egyptian plant financed by Egyptian banks. They’re only hurting themselves, because this plant and port provide Egyptians with good jobs.”


By: Lauren Williamson
+44 (0) 20 8652 3214



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