Acron Group Releases 9M 2013 Operating Results

 Acron Group’s Consolidated Output (operating results for Acron, Dorogobuzh, Hongri Acron and NWPC).

Mineral fertilisers

Industrial products

Phosphate inputs

Сhairman of Acron’s Board of Directors Alexander Popov commented on the Group’s performance:

“Acron Group’s ammonia and mineral fertiliser output in 9M 2013 was up 6% year-on-year to 3.9 million tonnes mainly due to the nitrogen sector. Demand for nitrogen fertilisers has remained strong this year, allowing the Group to fully utilise its capacity to produce basic nitrogen fertilisers: ammonium nitrate, urea and UAN. In 2013, Dorogobuzh has not shut down its ammonia unit for a long overhaul and ramped up its fertiliser output 26% in 9M 2013. Our Russian facilities have started producing NPK entirely from our own apatite concentrate produced by NWPC, and stable supplies allow us to maximise capacity utilisation. At Hongri Acron, complex fertiliser output was down 13% due to ongoing stock reserves optimisation efforts.

“Russian demand for organic compounds and non-organic synthesis products continues to decline in the context of the general economic slowdown, which has slightly affected operating results for the key products in the sector: UFR, low-density and technical-grade ammonium nitrate.

“The Oleniy Ruchey mine successfully reached an output rate of 65,000 tpm of apatite concentrate, which is equal to consumption at Acron and Dorogobuzh. Acron Group also commenced shipping small pilot lots of apatite concentrate to third-party consumers. Our primary intention with these small shipments is to demonstrate product quality to potential consumers. We are confident that there will be demand for all the volume we can offer once the first stage of the mine reaches design capacity because apatite concentrate fits all consumers in Russia and neighbouring countries in terms of technology.

“In Q3 2013, supply exceeded demand on the global mineral fertiliser market, which suppressed prices for all types of fertilisers. In Q3, NPK prices decreased due to weak potash and phosphate markets. Recovery of strong demand in this sector is only possible after conditions improve in the basic markets. Urea prices were the hardest hit among nitrogen products due to massive urea exports from China and commissioning of a greenfield export-oriented production in Algeria. Even so, the market has seen some revival since late Q3, because the available volumes of Chinese products have decreased while demand remained strong. Moreover, the decision of Ukrainian producers to suspend production in September-October supported the market.”

Average Global Prices, USD/t *

* Indicative prices, FOB Baltic Sea/Black Sea.

Operating Results for Acron, Dorogobuzh, Hongri Acron and NWPC