Russia's PhosAgro posts 5.2% rise in Q1 fertilizer production

23 April 2014 13:49 Source:ICIS News

LONDON (ICIS)--Russia's PhosAgro enjoyed a strong start to 2014 with first quarter production volumes up 5.2% year on year to just over 1.6m tonnes, the leading phosphate-based fertilizer manufacturer announced on Wednesday.

The vertically-integrated producer posted a 4.3% rise in output of phosphate-based fertilizers to 1.23m tonnes from 1.18m tonnes in the same period of year prior, with production of nitrogen-based fertilizers up 8.2% at 374,800 tonnes from 346,300 tonnes in Q1 2013.

The Moscow-based company said sales of phosphate-based fertilizers for the 13 weeks ended 31 March fell 6.1% year on year to 1.22m tonnes, although sales of nitrogen-based fertilizers jumped 26.3% to 425,300 tonnes from 336,700 tonnes in early 2013.

Production of diammonium phosphate (DAP) and monoammonium phosphate (MAP) climbed 7.7% to 570,500 tonnes from 529,800 tonnes in the year-ago period, while complex nitrogen phosphorus potassium (NPK) output was 15% higher at 498,900 tonnes.

Output of nitrogen fertilizers urea and ammonium nitrate (AN) both climbed more than 8% year on year, to 252,400 tonnes and 122,400 tonnes, respectively.

First quarter production at PhosAgro's apatit mine and beneficiation plant slipped 2.5% year on year to 2.17m tonnes from 2.23m tonnes in Q1 2013.

On the sales side, Q1 sales volumes fell in most product categories compared to the year-ago period, with DAP/MAP sales down 7.6% at 567,200 tonnes. However, sales of NPKs, AN and urea climbed 9.7%, 20.1% and 30.2%, respectively.

Commenting on the production results, PhosAgro CEO Andrey Guryev said: "We have maintained near 100% capacity utilisation throughout 1Q 2014. Favourable market conditions and higher demand have enabled us to increase substantially our sales of both concentrated fertilizers and NPKs to Latin America and Russia, where our year-on-year sales volumes to these markets increased more than 100% and over 30%, respectively.

"We changed our product mix in response to demand at the beginning of the year, increasing production of DAP/MAP after a sharp recovery in prices following the very low price floor we saw in 4Q 2013; we subsequently increased NPK production and sales in February and March after the stabilisation of potash and NPK markets."

The senior executive continued: "Looking forward to 2014, we believe that the effects of Uralkali's decision to stop export sales through BPC [Belarusian Potash Company] on the whole market have subsided, and we are seeing prices for key phosphate-based fertilizers normalise on normal market supply/demand conditions, backed by solid farmer economics on the demand side and increased cash costs on the supply side, given recent substantial sulphur and ammonia price increases."

By Richard Ewing