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Acron Group’s Mineral Fertiliser Output Up 3% in 9M 2020

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

Mineral fertilisers

Product, '000 t 9M 2020 9M 2019 YOY, %
Ammonia 2,071 2,049 1.1
Incl. in-house consumption * 1,908
1,795
Nitrogen fertilisers 3,634 3,887 -6.5
Incl. in-house consumption 562 868
AN 1,826 1,628 12.1
Incl. in-house consumption 170 320
Urea 887 946 -6.2
Incl. in-house consumption 391 548
UAN 921 1,312 -29.8
Complex fertilisers: 1,747 1,584 10.2
Incl. in-house consumption 27 24
NPK 1,663 1,495 11.2
Incl. in-house consumption 27 24
Bulk blends 84 90 -6.4
Total commercial output for Mineral Fertilisers 4,884 4,834 1.0

Industrial products

Product, '000 t 9M 2020 9M 2019 YOY, %
Organic Synthesis Products 307 370 -16.9
Incl. in-house consumption 155 191
Methanol 71 78 -9.5
Incl. in-house consumption 57 70
Formalin 110 132 -16.7
Incl. in-house consumption 96 120
Urea-formaldehyde resins 127 160 -20.7
 Incl. in-house consumption 2     1  
Non-organic compounds 757 608 24.7
Low-density and technical-grade ammonium nitrate 246 124 99.2
Industrial urea 92 96 -4.9
Calcium carbonate 373 342 9.4
Liquid carbon dioxide 41 41 1.2
Argon 5 5 -6.4
Total commercial output for Industrial Products 910 787 15.5

Phosphate inputs

Product, '000 t 9M 2020 9M 2019 YOY, %
Apatite concentrate 848 783 8.3
Incl. in-house consumption 684 603
Total commercial output for Apatite Concentrate 164 180 -8.7
TOTAL COMMERCIAL OUTPUT

5,957 5,800 2.7
Note: Commercial output is output less in-house consumption.

Comments from Chairman of Acron’s Board of Directors Alexander Popov:

‘In 9M 2020, Acron Group’s total commercial output was up 3% year-on-year to 5,957,000 tonnes, while Q3 2020 output exceeded 2 million tonnes for the first time in the Group’s history. Dorogobuzh was the main driving force behind this change following upgrades in late 2019 that increased the capacity of its ammonia unit, which in turn boosted output of all products produced from ammonia.

‘Mineral fertiliser output increased 1% year-on-year to 4,884,000 tonnes in 9M 2020. Industrial products were up 16% to 910,000 tonnes, mainly because of our success promoting industrial-grade ammonium nitrate in international markets, which doubled output over the reporting period.

‘In 9M 2020, ammonia output was up 1% year-on-year to 2,071,000 tonnes, and the volume of ammonia processed through to end products increased to 96% from 88%. In order to maintain our ammonia self-sufficiency for future products, we launched upgrades to the Ammonia-4 unit that are expected to be completed this quarter, increasing the unit’s capacity by 70,000 tpa and providing an opportunity to further expand output of ammonia-based products.

‘In the reporting period, output of agricultural-grade ammonium nitrate was up 12% to 1,826,000 tonnes. Agricultural-grade urea output was 887,000 tonnes, including 145,000 tonnes of granulated urea, a new product that the Group started producing in March 2020 at our Novgorod-based facility. Because of the weak UAN price environment, we cut UAN output 30% to 921,000 tonnes.

‘The Group’s total output of complex fertilisers was up 10% to 1,747,000 tonnes due to strong demand and an increase in production of phosphate feedstock — apatite concentrate — at the Oleniy Ruchey mine. In the reporting period, apatite concentrate output was up 8% year-on-year to 848,000 tonnes.’

Market Trends

In Q3 2020, global urea prices recovered due to strong demand from India following a seasonal drop in Q2 2020. India’s imports and seasonal demand in Brazil and Europe are expected to support the market through Q4. Additional support for urea prices will come from higher production costs in Europe driven by the recovery in gas prices.

Ammonium nitrate prices recovered in Q3 2020 after a seasonal decrease in Q2, while UAN prices fell due to declining seasonal demand in the United States, the key UAN market.

NPK prices decreased slightly in Q3, while the price trend for the basic product basket was mainly positive, with an increase in urea and DAP prices and a minor decrease in potassium chloride prices. This curbed the NPK premium over the basic product basket, which remained relatively high at approximately 20%.

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

Q3 2020 Q2 2020 Q3 2019 Q3 2020 / 
Q2 2020  
change
Q3 2020 / 
Q3 2019  
change
NPK 16-16-16 253 258 295 -2.3% -14.4%
AN 162 153 196 -20.8% -19.4%
UAN 114 144 142 -20.8% -19.4
Urea 231 207 247 -+11.6% -6.6%
Ammonia 186 197 216 -5.2% -13.6%