argus fmb phosphates€¦ · this established report offers a 12-month forward view of the global...

Copyright © 2013 Argus Media Ltd

Argus FMB PhosphatesFormerly FMB Weekly Phosphates Report

price guidemarket summary

producers cut back, traders sell short as mar-ket is brought more into balance for JanuaryThe phosphates market seems a little more balanced this week thanks to production cut backs. Traders have also been selling short in recent weeks in a falling market and need to cover. While little upside is seen, traders are now considering when to start going long. Tampa is steady at $480/t fob. Demand is emerging in Latin America and Ethiopia has tendered for 100,000t DAP - although Saudi product is widely expected to be most competitive.

Outlook: flat to soft

Highlights this week:

▪ PhosChem sells 42,000t DAP/MAP at $480/formula

▪ Ethiopia tenders for 100,000t DAP

▪ Australian and Jordanian DAP prices fall to $510/t fob

450

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525

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625Morocco Tampa US barge

dap FOB prices

An Argus Media company

This established report offers a 12-month forward view of the global phosphates market. Price forecasts are offered for major benchmarks, covering DAP, MAP, phosphoric acid and phosphate rock. Each issue provides a summary of the major issues influ-encing supply and demand:

• Global trade balances for DAP, MAP, acid and rock• Projected trade balances with 12-month horizon• Comparison of DAP production costs• Capacity additions and project updates

For more information, contact us at [email protected]

monthly phosphates Forecast report

raw material contracts

phosphoric acid/t - p2O5

cfr India $/t Q1-13 770 Q4-12 855cfr Western Europe $/t Q4-12 1070-1140 Q3-12 1070-1140cfr Brazil $/t Q3-12 1000 Q2-12 1000-1050phosphate rock (% BpL)fob Jordan (68-70) $/t Q4-12 150 Q3-12 150-155cfr India (68-70) $/t Q4-12 174 Q3-12 175-178cfr India (70-72) $/t Q3-12 195-200 Q2-12 195-200fob North Africa (69) $/t Q4-12 160-180 Q3-12 160-180sulphurcfr Tampa $/lt Q4-12 160 Q3-12 170cfr north Africa $/t Q4-12 170-185 Q3-12 185-210Ammoniacfr Tampa $/t Jan-13 673 Dec-12 685* - No recent biz

spot prices

17-Jan 10-Jan

dap/map/tsp – fob bulkDAP Tampa $/t 480 480-485DAP Tunisia $/t 530-540 530-540DAP Morocco $/t 520-540 520-540DAP Baltic/Black Sea $/t 480-520 480-520DAP China $/t 515*-520* 515-520DAP Saudi Arabia (KSA) $/t 520-535 515-535DAP Mexico $/t 500*-505* 500-505DAP Australia $/t 500-510 575DAP US Gulf domestic barge $/st 460-465 465-470DAP Central Florida rail car $/st 470 470-480DAP China ex-works $/t 492*-507* 492-507DAP Benelux fot/fob duty paid/free $/t 560-565 560-565MAP Baltic $/t 480-510 480-510MAP Morocco $/t 505-525 505-525TSP Tunisia $/t 440-445 440-445TSP Morocco $/t 460*-480* 460-480TSP China $/t 330-340 330-340TSP Eastern Med (Lebanon/Israel) $/t 430-440 430-440dap /map – cfr bulkDAP/MAP Argentina/Uruguay $/t 515-520 515-520MAP Brazil $/t 510-520 510-515DAP India (contract) $/t 580 580DAP Pakistan $/t 555*-560* 555-560Npk 16-16-16 – bulkfob FSU $/t 380-420 380-420cfr China $/t 430-460 430-450cfr South East Asia $/t 430-460 430-450

Issue 13-03 | Thursday 17 January 2013

Copyright © 2013 Argus Media Ltd of 10

Argus FMB Phosphates Issue 13-03 | Thursday 17 January 2013

market aNaLysis

dap/map/tsp producer exports/availability January (’000t)producer prod commitments Bal

EuroChem 175 35kt MAP US +525kt DAP Germany12kt DAP Benelux10kt DAP France4kt DAP Poland4kt DAP Czech/Slov5kt DAP Baltic3kt DAP Serbia5kt DAP SE Asia3kt MAP Germany3kt MAP Poland2kt MAP Czech/Slov2kt MAP Serbia5kt MAP Russia4kt MAP SE Asia5kt MAP Africa25kt MAP Russia8kt MAP Ukraine6kt 20-20-0 Russia4kt 20-20-0 Ukraine

PhosAgro 250 40kt MAP US +2345kt DAP Thailand20kt MAP S Africa10kt DAP Europe10kt DAP Africa25kt 15-15-15 Africa27kt 20-20-0 Turkey50kt MAP est local

UralChem 40 15kt MAP Turkey5kt MAP Poland20kt regional

OCP 160 50kt DAP Europe +200*60kt MAP/TSP US40kt DAP local

GCT 130 30kt TSP Bangla +7030kt TSP Brazil

JPMC 30 5kt DAP Turkey +25Fertinal 85-90 22 MAP Amer/US 0

45 MAP Australia10-15 MAP domestic

PhosChem 200 42kt DAP/MAP L Am +5830kt DAP C Am70kt contract

MissPhos 31 6kt DAP Mexico +25CF Industries 31 6kt DAP Ecuador +25Sabic/Ma’aden 170 25kt DAP India +70

25kt DAP Thailand50kt DAP Ethiopia

Prices overall remain under pressure but the overhang on the supply side is considerably less than we reported last week as producers cut back on production and traders position to cover short selling particularly in Latin America.

Bottom line, demand is slowly emerging in Brazil, Argentina, Uruguay (Isusa has tendered for 25,000t this week) and Ethiopia - where at last a 100,000t DAP tender emerged this week. This tender will almost certainly be eaten up by Saudi Arabian product, which will be of concern to Russian and Jordan producers. But Russian producers have cut back output and put significant sales on the books this week. PhosAgro has little to sell before 2H February and raw material shipments suggest EuroChem has cut back on output. UralChem meanwhile is reported to have placed product into Turkey.

It is clear that significant production cuts are taking place in response to weak market conditions. A slowdown in ammonia and sulphur requirements by key producers and market intelligence supports the view that producers are making DAP/MAP in response to market demand and that operating rates are significantly down. It is impossible to accurately assess the true level of capacity utilisation worldwide, but the cuts in North Africa and Russia are thought to be significant.

Prices are broadly unchanged this week. PhosChem has sold DAP/MAP at a solid $480/t fob and Central American buyers say traders are not offering much below this level. This is also the threshold level for Russian DAP producers. PhosAgro will not entertain offers lower. Jordanian DAP has been sold into Turkey at prices reflecting around $510/t fob which is a significant reduction on last business but necessary to effect sales in the Med. Surprisingly, a substantial amount of Australian DAP has been sold to SE Asia this week at $510/t fob. Australia is normally a phosphate import market at this time but the recent drought may have affected application.

US domestic prices have largely marked time with DAP trading at $465/t fob Nola but liquidity remains thin. Logistical issues on the river are easing thanks to increased rainfall.

The concerns remain the strength of the US export line up given that producers have reportedly filled their distribution systems. US exports are typically thin at this time of year, but the last two months have seen significant rises in DAP/MAP inventories. Stocks rose over a fifth in December according to the latest TFI data to nearly 1.1m st. This is normal, but there is a raft of imports from Russia, Morocco and Mexico hitting the US shores in Q1. This may well limit upside.



Fundamentally, we still do not see any major recovery until India returns in early Q2 to negotiate 2013-14 DAP import requirements. Until then, the market looks flat but the price erosion looks close to having bottomed out.

HigHLigHts tHis week

supply

▪ Production cuts in North Africa and Russia

▪ US DAP/MAP inventories climb over 20% in December

▪ PhosAgro has 170,000t phosphates exports in January...

▪...and has one MAP cargo for 2H February shipment

▪ Australian DAP exports emerge earlier than usual

demand

▪ Pockets of demand in Uruguay, Argentina and Brazil

▪ Uruguay tenders for 25,000t DAP and MAP

▪ Ethiopia tenders for 100,000t DAP

▪ Turkey buys 20,000t DAP/MAP from Jordan and Russia

▪ Sri Lanka tenders for 24,000t TSP

▪ South Korea buys Vietnamese DAP

▪ BCIC issues new phosphoric acid tender

pricing

▪ US Tampa DAP price steady at $480/t fob

▪ US barges treading water at $465/st fob for domestic

▪ Brazilians bid $510/t cfr for MAP

▪ Jordanian DAP price falls to $510/t fob

▪ Australian DAP price also drops to $510/t fob

N. america

us exportPhosChem has sold 20,000t DAP/MAP on a formula basis to Latin America for February shipment. It has also sold a 22,000t DAP/MAP combination to the same market at $480/t fob Tampa spot. Central American importers are similarly reporting consistent offers from traders around the $480/t fob level.

There are additionally freight inquiries from Trammo to load 30,000t DAP from Pascagoula Australia 1-7 February and 5,000t to Abidjan/Doula (Ivory Coast/Cameroon).

The US exported 211,807st of DAP in December, down 42.5% on December 2011 according to the latest TFI data. There was a shipment to India totaling 44,382st, plus 58,394st loading for Mexico. Brazil took 19,639st with Argentina 13,977st. All other significant shipments were to central and Latin America or contract shipments to Japan.

For the calendar year, exports were 3.38m st, down 16.7% on 2011. The major swing has been total exports to India

tHe pHOspHates wOrLd tHis week

us - phoschem sells 42,000t dap/map offshore to Latin america -

tampa steady at $480/t fobus domestic - little liquidity but us dap trades at a solid $465/st

fob Nolastocks of dap rise to 1.1m st as

of end december

uruguay - isusa tenders for 25,000t dap/map

russia - producers look comfortable now for

January

North africa/middle east - production cuts believed to be taking place but no official

announcement. Jpmc sells dap to turkey but fob levels fall to

$510/t fob

Brazil – Offers still at $520/t cfr versus bids $10/t lower australia - Quantum sale

to se asia sees dap price erode to $510/t fob

ethiopia - aise tenders for

100,000t dap

turkey - igsas and another buyer take russian map and Jordanian dap total-

ling 20,000t this week



which fell substantially to 1.12m st (down 51.7%). Shipments to Canada were also down majorly by 40.6% to 73,820st. The overall decline was partially offset by increased exports to Argentina which more than doubled (up 129.9%) to 188,964st and Brazil (up 46.8% to 486,112st. Exports to Colombia were up 37.3% to 134,067st. Other notable gains included Guatemala (up 52.7% to 88,672st), Japan (up 11.1% to just over 200,000st), and Peru (up 80% to 145,464st).

MAP exports in December 2012 were 118,893st, up 46.4% on December 2011. The main recipient was Canada were shipments reached 50,963st. There were also shipments to Mexico, Colombia, the Ivory Coast and Thailand.

For the year as a whole, exports were down 17.6% to 1.69m st. Canada was the main export destination, followed by 349,953st to Australia, and 266,859st to Brazil. Canadian exports were down 25.4%, but MAP to Australia was up 35.1. Brazilian MAP exports were down more than half compared to 2011.Argentina (200,045st), Colombia (109,677st) and Japan (120,068st) were the other major recipients.

us domesticIn the domestic market Mosaic has also sold at $465/st fob for DAP barges. Trammo has also sold a DAP barge prompt at $465/st fob Nola for domestic market. Imported Mexican and Russian are reported to be at around a $5/st discount. Currently, reported offers are lower at $460/st fob but liquidity is pretty thin with little urgency to buy. Inventories continue to build at the warehouse level. Interest in pre-pay deals at the terminal is unimpressive. The logistical situation on the river is reported to be improving thanks to recent rains. On MAP, there is an offer at $470/st fob Nola for offshore light-coloured material and $480/st fob for dark.

TFI production data for December shows DAP output up 14% on November at 601,000st. This is unchanged from December 2011. Inventories showed another substantial rise in December, increasing 21% to 592,000st. This was still down 2% on the December 2011 level. Producer disappearance rose 25% on November to 500,000st.

MAP production fell 2% in December to 471,000st. This was up 8% on the same period of 2011. Closing inventories also rose 22% to 494,000st. This was however down 7% on December 2011. Producer disappearance fell 3% on November to 384,000st, but was up nearly a third on December 2011.

Bottom line, DAP/MAP inventories, at 1.086m st, have showed two months of significant rises. But the volumes are still manageable. January will however see significant imports with 20,000t MAP from Mexico, 40,000t MAP from PhosAgro, 20-25,000t from EuroChem plus several vessels for Koch/Helm of DAP/MAP and TSP ex-OCP Morocco.

The US will likely see drier than normal weather throughout the Plains and the western Midwest as the country heads into the spring planting season, according to Commodity Weather Group. And these regions, already suffering the most severe effects of the 2012 drought, do not have much precipitation forecast in the 3-month outlook, which could delay fertilizer applications as farmers wait for enough moisture to optimize their nutrient uptake.

Failure to receive sufficient moisture along the Mississippi river system will result in continued logistical headaches for fertilizer suppliers who primarily barge supply to terminal hubs along the river. For suppliers, it is a matter of timing and watching the weather closely to gauge when spring demand will truly surface. Right now, many say it is too early to turn fully to alternative transport methods but they are under consideration.

Additionally, the prospect of continued or increased dry conditions will weigh heavily on farmers as they enter the 2013 planting season.

The 2012 summer brought historic drought conditions to the US, significantly damaging corn and parts of the soybean crops. This prompted a run up in crop prices. In January, corn front month prices were $6.50/bushel and sharply increased to $8.00/bushel by August, reaching an all-time high. The USDA notes that it will likely be later this year when the marketplace sees the full impacts on food inflation, with estimates of 3-4pc inflation for 2013 versus the more typical 2.5-3pc annual inflation.

In terms of temperatures, the independent forecasting group expects there to be a good chance the US will warm up quickly in March and head into a relatively normal spring.

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ceNtraL aNd LatiN america

mexicoAn Argentina buyer has taken 10,000t of Mexican Innophos TSP at $450/t cfr from Nitron.

BrazilA trader is bringing in a cargo of Russian MAP thought to be for February shipment. Last sales from this remain in the low-$520s/t cfr. Bids are at $510/t cfr versus offers at $520/t cfr. No new business is confirmed this week. DAP is reportedly on offer at $510/t cfr.

A cargo of Chinese 44% TSP is reported to have been sold at $392/t cfr.

December MAP imports reached 121,430t according to latest trade data, bringing year-to-date imports to 1.772m t, a fall of 15.8% versus 2011.

Of the December imports, 56,427t were imported from OCP Morocco, 34,532t from Russia and 18,652t from the US. For the year as a whole, Morocco was the main supplier with 928,930t (a rise of 21.8%), with Russia in second place with 493,209t (down 27.3%) and the US third with 307,520t (down 45.5%).

December DAP imports reached 50,267t, comprising 26,779t from Morocco and 23,488t from the US. For the year as a whole, DAP imports were up 18% at 577,615t, with the US the main contributor (with 415,260t – a rise of 67.1%) and Morocco in second with 162,223t (up a more modest 2.4%).

Meanwhile there are reports of two part cargoes of Russian MAP sold in the low-$520s/t cfr. This is reportedly for

argentinaReports have circulated that Nidera bought a small lot of Russian MAP from a trader this week at $510/t cfr. This remains unconfirmed and appears unlikely. Nitron is bringing

argus FmB spot sales selection 17 January 2012

product Origin seller Buyer destination ’000t $/t bulk shipment

dap US PhosChem Various Latin America 20 Formula January

US PhosChem Various Latin America 22 480 fob January

Lithuania EuroChem Germany 25 530 fob January

Lithuania EuroChem Benelux 12 527 fob January

Lithuania EuroChem France 10 523 fob January

Russia UralChem Igsas Turkey 15 TBC early February

Jordan Trammo TBC Turkey 5 low-530s cfr January

Australia Quantum TBC SE Asia 25 510 fob January

Vietnam South Korea 6 520 cfr January

tsp China Brazil 25 392 cfr January

Mexico Nitron Argentina 10 450 cfr January

Bagging Terminal Management Bulk Handling Equipment Sales Consultancy Expediting

B U L K H A N D L I N G S P E C I A L I S T S

www.nectargroup.net Nectar Group Ltd Email: [email protected] Tel: +44 1708 386 555

http://www.nectargroup.net



in a February DAP/MAP loader from Russia which has been sold to various buyers such as Glencore, Bunge and others in the $520s/t cfr.

An Argentina buyer is reported to have taken 10,000t of Mexican Innophos TSP at $450/t cfr.

uruguayIsusa tendered on 16 January for 17,000t MAP and 8,000t DAP for February shipment to Montevideo. Offers were not known at presstime.

Fsu/eurOpe

russiaPhosAgro looks comfortable for January-February and is reported to have one MAP cargo for 2H February loading for which it will not entertain bids below $480/t fob according to several traders. Bids at $470/t fob are being rejected firmly. The January line up comprises:

▪ 40,000t MAP for Trammo/US

▪ 40-45,000t DAP for Mekatrade/Thailand

▪ 20,000t MAP for Mekatrade/South Africa (loading)

▪ 27,000t 20-20-0 for Helm/Turkey

▪ 10,000t DAP for Agrium/Europe

▪ a cargo of 15-15-15 loading for Africa

▪ 10,000t DAP sold by a trader to an African markettOtaL: 172-177,000t

Mekatrade is in the freight market to load 6,000t MAP Novorosissk to Sibenik Croatia 27-28 January. There will also be shipments to local and regional markets.

PhosAgro shipments of NPKs to Venezuela have been pushed back to February and March (these were old awards under the last IPSL tender).

EuroChem reports the following sales for January shipment:Lifosa DAP

▪ 25,000t to Germany at $530/t fob

▪ 12,000t to Benelux at $527/t fob

▪ 10,000t to France at $523/t fob

▪ 6,000t to UK/Ireland at $523/t fob

▪ 4,000t to Poland at $545/t fob equivalent

▪ 4,000t to Czech Republic/Slovakia at $545/tfob

▪ 5,000t to Baltic markets

▪ 3,000t to Serbia

▪ 5,000t in containers to SE Asia at $510-520/t fobtOtaL: 74,000t

Kingisepp MAP

▪ 35,000t to EuroChem/US under formula (old business)

▪ 3,000t to Germany at $510/t fob

▪ 3,000t to Poland at $515/t fob

▪ 2,000t to Czech Republic/Slovakia

▪ 2,000t to Serbia

▪ 5,000t to Russia

▪ 4,000t in containers for SE Asia ($510-515/t fob)tOtaL: 54,000t

Belorechensk MAP

▪ 5,000t to Africa (plus NPKs and MOP) at $510/t fob


▪ 8,000t to UkrainetOtaL: 38,000t

Belorechensk 20-20-0+S


▪ 4,000t to UkrainetOtaL: 10,000t

In clarification of previous reports, EuroChem will not have a cargo for Ameropa/Latin America in January.

Meanwhile UralChem has sold 15,000t MAP to Turkey for early February shipment at an undisclosed price. It will ship small lots to Poland for Nitron and the remaining production will move locally.

Agropolychim is currently producing MAP, DAP and NPKs for regional demand. It will look at TSP sales later in the month as European demand kicks in.

In company news, iTrade Fertilisers SA is pleased to announce that effective January 2013, it has been appointed by NF Trading AG as the exclusive sales channel in China and Thailand for Rossosh NPKs. iTrade will market Rossosh NPK’s in China in exclusive cooperation with Fertisul International Ltd.

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turkeyTrammo has sold 6,000t of Jordanian DAP to a Turkish buyer in the low/mid-$530s/t cfr. It is in the freight market to load 4-7,000t DAP prompt Aqaba to Iskenderun. Meanwhile Igsas is understood to be the buyer of 15,000t MAP ex-UralChem for early February shipment at an undisclosed price.

aFrica/middLe east

ethiopiaAISE has issued a tender closing 7 February for 100,000t of DAP.

BeninA tender has closed on 16 January for 26,500t NPK 14-23-14+5S plus 17,000t of urea.

JordanTrammo’s sale of 6,000t Jordanian DAP is understood to net back to around $510/t fob Aqaba.

saudi arabiaThe Anna Meta is under loading at Ras Al Khair with 50,000t for Ethiopia covering the last tender award. There are no other sales for January. Reports that MPC has cut production at Ma’aden have been denied. Sabic is in the freight market to load 50,000t DAP from Ras Al Khair to Djibouti, Ethiopia 10-15 February covering its tender award there.

iNdiaN suB-cONtiNeNt

indiaIn clarification of earlier reports, it is now understood that the last sale of Ma’aden DAP to India was made in the mid-$530s/t cfr.

The Suleyman Pasli with 27,490t Saudi DAP arrived at Kandla on 12 January for Kribhco. Meanwhile the Ocean Freedom with 54,436t Moroccan DAP arrived at Kandla also on 12 January for Zuari/Chambal. Lastly, the Yasa Aysen is expected to berth on 27 January with 46,839t US DAP for Chambal at Mundra (via Keytrade).

DAP stocks are various ports are as follows:

▪ Kandla – 100,000t

▪ Mundra – 43,000t

▪ Mangalore – 31,601t

▪ Vizag – 4,000t

▪ Gangavaram – 10,000t

▪ Kakinada – 7,000t

The fertilizer subsidy problem rumbles on. This week, the

fertilizer ministry asked the finance ministry to make banks lend to fertilizer companies against subsidy receivables guaranteed by the fertilizer ministry. The government would then pay back the banks from the new 2013-14 fertilizer budget. The subsidy bill for phosphates has not been paid since July last year as fertilizer subsidy funds have run out. The current fiscal situation does not auger well for subsidy arrangements in 2013.

Local press reports indicate that GSFC is embarking on a $330m expansion of its fertilizers complex at Sikka in Gujarat. The project comprises the setting up of an additional train to produce 1,650t/day of DAP and and equivalent NPKs plus a 300t/day SSP unit. The project also provides for setting up of a 500t/day phosphoric acid plant, a 1,800t/day sulphuric acid plant and a waste heat recovery based 15.5-MW power plant. The project is likely to be completed with 32 months of grant of all approvals.

pakistanLatest NFDC data shows DAP offtake in November reached 248,000t, up more than 50% on the same month of 2011. This brought rabi offtake for the October-November period to 433,000t, an increase of 19.4% year-on-year.

November DAP production at Fauji reached 67,000t, with imports recorded at 83,000t. The NFDC estimates DAP imports at 150,000t for December and January.

Rabi 2012-13 started with 227,000t of opening inventory of DAP. Domestic production estimates are 349,000t.

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Total planned imports are 379,000t. This will make total availability of DAP as 955,000t against the estimated demand of 738,000ts.NFDC concludes that DAP availability appears to be comfortable in the coming months.

BangladeshBCIC has issued a tender closing 25 February for 30,000t P2O5 phosphoric acid. Offers are to be made in lots of 10,000t P2O5 minimum with the first shipment to commence within 21 days of L/C opening, with the second and third to follow within 21 days of each other.

sri LankaSri Lanka will close a tender on 28 January for 24,000t TSP (12,000t each to CCF and CFC).

se asia/OceaNia

china Chinese DAP offers are reported out of bonded warehouses as high as $560/t fob with little incentive to sell.

In the domestic market, DAP production is running at around 75% of capacity with MAP running considerably lower at 50-60% on account of slow demand. In general, MAP production is ramping up for the spring season.

DAP prices are essentially unchanged at a provisional RMb 3,200-2,330/t delivered northern China and distributors are putting product in place for the spring application season.

NPK producers are stocking up on MAP and some MAP producers are reported to have restarted production. Ex-works prices for powdered 55% MAP are RMb 2,300-2,350/t with sales reportedly made slightly below this figure.

australiaThe sale of a 25-30,000t DAP cargo by Quantum of Australian DAP to Thailand and Vietnam is confirmed as netting around $510/t fob. The unusual shipping period (during the Australian high season) is thought to be due to the recent drought and fires in the country slowing application.

se asia

south koreaSouth Korea has bought 6,000 tonnes of DAP from Vietnam. The price was $485/t fob Haiphong, which takes the cfr price to around $520/t.

thailandRussian 16-16-16 is on offer/sale to Thailand at $460/t cfr bulk.

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Essentially, we are looking for a bright, confident and multi-lingual person with an inquisitive mind and someone who is fluent in one or more of the following languages — Spanish, Italian and French.

The role requires extensive liaison with our wide base of industry contacts — producers, traders and buyers — in the European fertilizer industry, in order to build an accurate picture of the various fertilizer markets within Europe in terms of price movements, deals and other industry news across a range of fertilizer products and country markets.

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VietnamVietnam imported 59,807t of DAP in December, plus 24,132t of NPKs.

pHOspHate rOck

canada Arianne Resources seek shareholders’ approval to change its name to “Arianne Phosphate Inc.” at its next annual general meeting of shareholders in May, 2013 to recognize the focus of its activities on developing the Lac à Paul phosphate deposit. Such name change will also be subject to regulatory approval. The Company also announced its intention to divest all non-phosphate exploration properties in order to focus exclusively on becoming a Canadian phosphate producer.

cOmpaNy News

Quantum hires Latin american marketeerQuantum Fertilizers has announed that Sergio Argenteri, who has 20 years of experience in the fertilizer industry both in Europe and South America, will join Quantum Fertilisers with responsibility for Latin America, excluding Chile. Sergio’s experience in Latin America will allow Quantum to expand and help us better serve Latin American markets.

Acron releases financialsAcron has released its financial statements for the first nine months of 2012 – financial highlights comprise:

▪ Revenue up 16% year-on-year to RUB 53.47bn ($1.72bn)

▪ EBITDA up 7% to $490m - EBITDA margin 28% against 31% in 2011

▪ Net profit up 13% to $377m

▪ Net debt increased 27% to $1.39bn

Acron attributed the increase in revenue to the flexibility of its product portfolio, the Group’s focus on premium markets in Asia and Latin America, and a favourable pricing environment. AverageQ1-Q3 2012 indicative prices for key products were as follows:

▪ NPK 16-16-16: $454/t fob

▪ AN: $306/t fob

▪ Urea: $408/t fob

▪ UAN: $285/t fob

The 9M 2012 cost of sales was up 20% year-on-year to RUB 30.32bn. This increase was caused mainly by higher prices and consumption of raw materials.

Fluctuation in the RUB/USD exchange rate during the reporting period affected the Group’s financial results. As of 30 September, 2012, the RUB/USD exchange rate was RUB 30.92 to USD 1, down from RUB 32.20 on 31 December, 2011. As a result, in the reporting period a foreign exchange gain from revaluation of the Group’s assets, loans and liabilities in the amount of RUB 659m was posted to its financial activities; an foreign exchange gain of RUB 719m was posted to operating activities.

Net profit in the reporting period totalled RUB 11.72m, up 13% year-on-year. The Group’s net profit margin reached 22%, against 23% year-on-year.

In the reporting period, the value of the Group’s fixed assets was up 35% to RUB 45.30bn. This considerable growth was provided through a wide-scale capital investment programme during the period worth RUB 12.75bn. More than half of this amount was allocated to implementing the Group’s priority project to produce its own raw phosphates. Modernisation and launching of new equipment at the Group’s Russian production facilities was another important part of the expenses. Engineering design work is proceeding for the potash project at the Talitsky area of the Verkhnekamsk potassium-magnesium salts deposit, as well as for construction of a new 700,000t/year ammonia unit in Veliky Novgorod.

As of 30 September 2012, available-for-sale investments totalled RUB 25.68bn, up 29% from the end of 2011. The Group’s interest in Uralkali and Azoty Tarnow, whose market price increased in the reporting period, is included in this item.

The Group’s inventory increased 27% to RUB 11.67bn against RUB 9.18bn at the end of 2011. The increase in inventory reflects increased volume and higher prices on the raw materials, work-in-progress and finished products inventory.The Group continues to accumulate funds to implement its major investment programme while maintaining sufficient financial stability and liquidity. The Group’s total debt was RUB 60.42bn, up 25% from the beginning of 2012. With a RUB 11.97bn increase in debt, cash on the Group’s books was also up RUB 4.01bn. As a result, net debt increased RUB 7.87bn to RUB 42.81bn, the Group’s debt burden remains at an acceptable level and allows the Group to continue implementing its investment programme at outpacing manner.

In Q4 2012, there was dip in main fertilizer prices due to the off season period in most countries. The Group’s Q1 2013 expectations are optimistic, since current prices on agricultural products are fairly high, stimulating growers in most parts of the world to use more fertilisers while prices remain acceptable.

Fertilizer


illuminating the markets of 10

Chairman of the Board of Directors Alexander Popov made the following comments on the results:

“The past nine months saw a number of important developments at Acron Group, including the start of commissioning operations at the Oleniy Ruchey mine. We have completed an important strategic task by ensuring vertical integration of the Group’s phosphate production chain. The first tonnes of Oleniy Ruchey apatite concentrate were produced in December 2012; by the middle of 2013 the project will reach capacity, which will secure our raw material independence, strengthen the competitive advantages of our products and increase the profitability of our whole business. Furthermore, at the end of 1Q 2012, a new urea unit with a capacity of 335,000 tonnes per annum started up at the Acron (Veliky Novgorod) site. Over the following months the unit reached its design capacity and continues in normal operations mode.

“In the reporting period, the Group produced 4.43 million tonnes of commercial products, up 2% year-on-year. Ammonia production increased 3% to 1.34 million tonnes; nitrogen fertiliser production was up 11% to 1.99 million tonnes. At the same time, complex fertiliser production was down 1% to 1.92 million tonnes. Industrial products output did not change significantly. We consider our production results as high taking into account that even the temporary suspension of operations at our Russian NPK units in June and July 2012 and the large-scale overhauls at our Acron and Dorogobuzh sites did not have a significant adverse effect on our final results.”

For further swaps information contact: Ron Foxon

& Alexey Paliy, FIS Ltd - Office : +44 207 090 1122 or

Cell: +44 7738726557 [email protected]

Fis cash settled swaps – 16 January 2013

month Bid Offer mid

dap fob Nola (st)

Feb 13 445 453 449

Mar 13 442 450 446

Apr 13 444 457 451

dap fob tampa (metric tonne)

Feb 13 465 475 470

Mar 13 463 470 467

Apr 13 460 477 469

FreigHt iNVestOr serVices

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itrade to sell rossosh Npks for NFiTrade Fertilisers SA is pleased to announce that effective January 2013, it has been appointed by NF Trading AG as the exclusive sales channel in China and Thailand for Ros-sosh NPKs. iTrade will market Rossosh NPK’s in China in exclusive cooperation with Fertisul International Ltd.

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