Phosphoric Acid, Phosphates & Fertilizers Experts

Acron Group’s Fertiliser Output Up 19% in 9M 2017

Chairman of Acron’s Board of Directors Alexander Popov comments on the results:

“Acron Group’s facilities increased mineral fertiliser output 19% in nine months of 2017. They achieved all-time high results for 9M and H1 due to sustainable operation of the ammonia unit commissioned in 2016 in Veliky Novgorod and upgrades to key production units at both facilities..

“The Group increased ammonia output by almost 25%, with the new Ammonia-4 unit more than tripling its output year-on-year to 582,000 tonnes (9M 2016: 176,000 tonnes). Following upgrades to the urea units at Acron’s Veliky Novgorod facility, urea output increased 19%. Ammonium nitrate output at the Acron and Dorogobuzh facilities increased 19% and 12%.

“Complex fertiliser output was up 46% over nine months of the year. Acron Group is adapting to changing market conditions and growing demand for complex fertilisers by increasing its output and range of brands. The Group will continue to produce new brands of NPK and blended fertilisers to meet the market’s needs.

“The Group hit another record with its NPK output, which climbed 17% due to implementing the project, which increased capacity at the two Veliky Novgorod-based NPK units to 2,000-tpd. In 2016, Dorogobuzh also revamped its NPK unit as part of a scheduled overhaul.

“In the reporting period, apatite concentrate output increased 5% despite poor results for Q1, which were caused by considerable overburden operations. In Q2 and Q3, apatite concentrate output hit a record high. Mine expansion work is underway, and the first 44,000 tonnes of ore were produced at the underground mine in Q3.

“We will continue to see output increase as an effect of our new investment programme for production expansion through 2025”.

Market Trends

Nitrogen fertiliser prices actively recovered in Q3 2017: in early July, urea prices were $180 FOB Baltics, and by late September they reached $260. The recovery was supported by strong demand from Brazil, which has boosted urea imports 50% this year. In September, the market was supported by aggressive demand in India, where favourable weather conditions encouraged generous fertiliser application. At the same time, higher coal prices triggered a cost increase in China. These factors combined to provide support for urea prices.

The fourth quarter is expected to see traditionally strong seasonal demand before the upcoming spring sowing season in the Northern hemisphere, which will further sustain prices. According to industry experts, prices will hover at a higher level until February 2018. However, further growth is limited by increased supplies from China, where exports regain competitiveness at current prices.

Prices for premium nitrogen fertilisers, AN and UAN, recovered late in the third quarter following urea prices. The AN premium over urea increased due to strong demand in Brazil. The UAN premium vanished because of increased U.S. output and stronger competition.

In September, NPK prices increased due to higher prices in the nitrogen and potash segments. The NPK premium over the basic product basket- – urea, DAP and potash – remained high.