OREANDA-NEWS. Chairman of Acron Board of Directors Alexander Popov comments on the results:

“In H1 2014, output of our key commercial products was 3,282 kt, up 6.2% year-on-year. Mineral fertiliser output increased 3.7% to 2,753 kt.

“These higher operating results are mainly attributable to a 24.8% increase in UAN output in the reporting period, made possible by an upgrade that increased the UAN unit's capacity to 1 mtpa in early 2014. NWPC (Oleniy Ruchey mine) also contributed to the results: apatite concentrate output in H1 2014 reached 420 kt, up 58% year-on-year.

“Complex fertiliser output was up 3.1% due to the output increase at our Veliky Novgorod (Russia) and Hongri Acron (China) facilities.

“Output of industrial products was up 13.1% to 493 kt due to a 53.2% increase in potassium carbonate output and a 18.8% increase in hydrochloric acid output.

“Today, the global mineral fertiliser market looks well-balanced and global sales are high. The price drop against 2013 was partially offset by reduced production costs for many producers, which ultimately delivered satisfactory conditions for both customers and producers. In H1 2014 we saw our strongest demand in Europe, the US and the CIS, while by midyear demand was up in Latin America and India.

“Despite the global market equilibrium, regional trade has its own imbalances. For instance, the Asian market is oversaturated with urea, principally because of increasing Chinese exports. As a result, this region has the lowest prices, with the FOB price for Chinese urea sinking as low as USD 240-250 per tonne. However, price dynamics in the Baltic, Black Sea and Mediterranean ports was not the same as in Asia, and prices stabilised at ~USD 300 per tonne. This was due to reduced available supplies from Ukraine, Egypt and Algeria, where producers are constrained to lower output for various reasons. As the core products of Acron's nitrogen business, nitrate fertilisers (ammonium nitrate and UAN) remain premium products in high demand. Prices for NPK 16-16-16 complex fertiliser have stabilised at ~USD 350-360 per tonne (FOB) and have potential for further increases as DAP/MAP prices for phosphate fertilisers go up due to stronger demand in Latin America and India.”