Ostchem increased production loading capacity and reduced prices for mineral fertilizers

OSTCHEM – nitrogen holding increased loading capacity of two mineral fertilizers production plants. Cherkasy “Azot” in particular increased loading from 30 up to 70%. At the moment workshops for the production of ammonia, ammonium nitrate, and urea are operating. In its turn “Rivneazot” increased its capacity up to 50% by starting ammonia, ammonium nitrate and LAN workshops.

Increase of capacity is primarily connected with seasonal demand from farmers for mineral fertilizers before the spring sowing season. Plants also cover the niche formed because of reduction in supply of mineral fertilizers by importers to Ukraine.

 

Sergiy PAVLYUCHUK, Head of Nitrogen Business, OSTCHEM:

“It is a planned increase in production loading of our plants. We increase capacity to cover the increased demand from farmers who, against all odds, are determined to carry out the spring sowing succesfully. In spring more than 70% of all fertilizers are applied, February and March are peak months of demand. All necessary workshops work.”

 

Seasonal increase in fertilizer demand and production scale, as well as a correction of gas prices allowed OSTCHEM to reduce the price for fertilizers significantly. In particular since February 1, retail prices for ammonium nitrate excluding delivery decreased by UAH 2,000 up to UAH 35,000 per ton and for urea – up to UAH 36,000. UAH per ton, LAN – up to UAH 27 thousand per ton. Price reduction for UAN amounted to UAH 4,000 up to UAH 29,000 per ton of the products.

 

Oleg ARESTARHOV, Head of Corporate Communications Department, Group DF:

“Preparing for spring sowing campaign is carried out under the influence of two interrelated factors. The first one is that farmers have not formed a sufficient supply of mineral fertilizers. The second one is that farmers postpone their purchase decision till the last moment. So we can see farmers’ delayed demand for products: if earlier fertilizers for the spring sowing season were purchased in September-December now peak of demand has moved to December-March. It  means that workload on OSTCHEM production facilities will be tremendous during this period, and those farmers who have provided them with products in advance will be undisputed winners.”

He noted that  shift in terms is connected with military risks as well as with a longer period of selling products by farmers.

 

In 2022  the volume of fertilizers consumption by  Ukrainian market amounted to: ammonium nitrate – 1 million tons (import – 330 thousand tons); urea – 410 thousand tons (import – 225 thousand tons); UAN – 580 thousand tons (import – 190 thousand tons).

 

In December 2022, Group DF announced an expected growth of fertilizers consumption in 2023 in the amount of 15-20%. Among the main factors influencing renewed growth of fertilizer consumption remains the grain agreement, which allows farmers to increase revenue and fertilizer purchases and also seasonal demand for fertilizers.