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Acron Group’s Output Reached 7.5 million tonnes in 2018

  The Group’s Consolidated Output (including operating results for Acron, Dorogobuzh and North-Western Phosphorous Company) 

Mineral fertilisers

Product, '000 t 2018 2017 YOY, %
Ammonia 2,616 2,595 0.8
Incl. in-house consumption 2,178
2,044
Nitrogen fertilisers 4,235 3,807 11.2
Incl. in-house consumption 958 1,117
AN 1,798 1,975 -8.9
Incl. in-house consumption 355 688
Urea 1,015 882 15.0
Incl. in-house consumption 602 429
UAN 1,422 950 49.7
Complex fertilisers: 2,519 2,894 -13.0
Incl. in-house consumption 44 75
NPK 2,329 2,219 4.9
Incl. in-house consumption 44 75
Bulk blends 190 675 -71.8
Total commercial output for Mineral Fertilisers 6,190 6,060 2.2

Industrial products

Product, '000 t 2018 2017 YOY, %
Organic Compounds 475 445 6.9
Incl. in-house consumption 239 221
Methanol 108 102 6.0
Incl. in-house consumption 87 82
Formalin 174 162 7.3
Incl. in-house consumption 151 138
Urea-formaldehyde resins 193 181 7.0
Incl. in-house consumption 1 2
Non-organic compounds 824 779 5.8
Low-density and technical-grade AN 170 132 28.7
Industrial urea 119 72 66.4
Calcium carbonate 473 514 -7.9
Liquid carbon dioxide 55 56 -1.4
Argon 7 6 19.1
Total commercial output for Industrial Products 1,060 1,003 5.7

Phosphate inputs

Product, '000 t 2018 2017 YOY, %
Apatite concentrate 1,214 1,167 4.0
Incl. in-house consumption 950 898
Total commercial output for apatite concentrate 264 269 -2.0
TOTAL COMMERCIAL OUTPUT

7,514 7,332 2.5
 Note:

Commercial output is output less in-house consumption.


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

“For the sixth year in a row, we are pleased to report an increase in production. This is not an accident or coincidence - it is the result of hard work on the part of our entire team. We are proud of these numbers, but we are not going to stop there. Our development strategy and the results we have already achieved will support several more years of sustainable production growth. 

“The most notable events of 2018 were the launch of the sixth urea unit and the record high UAN output. In 2019, we are excited to launch two nitric acid units that are currently in the final stage of construction. In addition, Dorogobuzh’s ammonia unit will be significantly upgraded to increase its capacity by more than 20%”.

Performance Analysis

In 2018, commercial products output reached a record high 7.5 million tonnes, up 2.5% year-on-year. Mineral fertiliser output increased 2.2% to 6.2 million tonnes.

Acron’s site in Veliky Novgorod upgraded its urea units and launched the new Urea-6 unit, boosting output to 1.134 million tonnes, which broke down as 1.015 million tonnes of agricultural urea and 119,000 tonnes of industrial urea. Output of UAN, which is produced from a urea solution, increases in line with the production of urea solution. In 2018, UAN output was 1.422 million tonnes, making Acron Group the world’s largest exporter of this fertiliser. Moreover, total UAN capacity today is even higher and reaches 1.7 mtpa.

Acron Group’s complex fertiliser production was down 13% year-on-year to 2.519 million tonnes due to reduced output of bulk blends in response to market conditions. Group shifted production to favour nitrogen products and NPK. Therefore, chemical NPK production was up 4.9%.

In 2018, apatite concentrate output was up 4% year-on-year to a record high of 1.214 million tonnes. Ore extraction from the underground mine is gradually increasing, and in the reporting period, the underground mine produced 18% of the total ore output.

Market Trends

In 2018, the average urea price was USD 251 FOB Baltics, up 15% year-on-year due to high demand in Latin America and India and decreased export from China due to higher production costs.

Along with urea prices, UAN prices also increased 23% in 2018 to USD 179 FOB Baltics. In the reporting period, the average AN price was down 2% to USD 188 FOB Baltics as demand shifted to other nitrogen fertilisers that are safer to transport. Acron Group reacted flexibly by shifting production from AN and increasing UAN output to the maximum.

In 2018, the average NPK price also showed an upward trend due to an increase in all three market segments: nitrogen, phosphorous, and potash. The average price for NPK 16-16-16 was up 13% to USD 300 FOB Baltics, and the NPK premium over the product basket remained high.

In Q4 2018, prices for almost all products rose in response to high seasonal demand in Latin America and increased cost of production in Europe due to higher gas prices.

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

Q4 2018 Q3 2018 Q4 2017 Q4 2018 / 
Q3 2018  
change
Q4 2018 / 
Q4 2017  
change
NPK 16-16-16 316 308 271 2.5% 16.4%
AN 186 213 218 -12.6% -14.7%
UAN 229 174 162 31.6% 41.4%
Urea 293 263 239 11.2% 22.5%
Ammonia 336 303 286 10.8% 17.6%
2018 2017 2018 / 
2017 

NPK 16-16-16 300 265 13%
AN 188 193 -2%
UAN 179 145 23%
Urea 251 218 15%
Ammonia 288 267 8%