Acron Group’s Fertiliser Output Up 25% in Q1 2017

 Group’s Consolidated Output (Operating Results for Acron, Dorogobuzh and NWPC)

Mineral fertilisers

Industrial products

Phosphate inputs

* Commercial output is output less in-house consumption

** Excluding Hongri Acron output (due to sale of the plant in 2016)

Chairman of Acron’s Board of Directors Alexander Popov comments:

“In Q1 2017, commercial output of mineral fertilisers and ammonia was up an amazing 25%. The Group’s total output of its core commercial products was 1,773 kt, up 17.8% year-on-year. 

“Output increased mainly due to the operation of the new ammonia unit, commissioned in 2016 at Acron’s production site in Veliky Novgorod. Moreover, Dorogobuzh upgraded its AN and NPK units in 2016, which led to record high production of these products in Q1 2017, both for Dorogobuzh and the Group. The significant increase in bulk blends output was due to production diversification and alignment with changing market needs. Production of apatite concentrate at the Oleniy Ruchey mine was down due to extensive overburden rock removal in the reporting period. Novgorod-based Acron increased commercial output 29.8% year-on-year, and commercial output at Dorogobuzh was up 9.7%. 

“We are successfully utilising the production potential of our new capacity, and we are confident that our output numbers will continue on a growth trend”.

Market Trends

In early 2017, urea prices continued to rise due to high seasonal demand. In February 2017, prices reached USD 260 FOB Baltic Sea Ports. Chinese producers increased capacity utilisation to 60%, against 50% at the beginning of the year. As a result, Chinese exports increased just as spring sowing orders began to wind down, causing prices to fall back to USD 210 FOB Baltic Sea Ports in April. It should be noted that prices remain high for coal, which is the main input for urea production in China, which makes most of the country’s urea producers unprofitable. As a result, we expect a decrease in Chinese capacity utilisation during the following months, which will support urea prices above USD 200 FOB China.

Prices for premium nitrogen products like AN and UAN also increased in Q1 2017 due to strong seasonal demand and the upward trend for urea, which is the base product. The AN premium remained high, while the UAN premium was still under pressure from the commissioning of new capacity in the United States and increased production.

In Q1 2017, NPK prices started to recover after a decline in 2016 due to higher prices for base products and strong seasonal demand. Premiums above the basket of products remained flat.

Average Indicative Prices, USD/t, FOB Baltic/Black Sea

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