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PhosAgro boosts fertilizer production by 9.2% in Q2 on capacity expansions

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PhosAgro boosts fertilizer production by 9.2% in Q2 on capacity expansions

Russian fertilizer producer PJSC PhosAgro increased output in the second quarter by 9.2% year over year to 2.2 million tonnes, which it attributed to solid contributions from newly launched urea and ammonia lines.

The company booked the largest increase in production of nitrogen-based fertilizers, which surged 43.6% to 552,700 tonnes, while phosphate-based fertilizer output remained flat at 1.7 million tonnes. Combined production of phosrock and nepheline rose 1.7% to 2.8 million tonnes, according to a July 30 statement.

On the sales side, PhosAgro registered an 8.4% annual increase to 2.2 million tonnes of fertilizers despite lower consumption in Brazil and import restrictions in Ukraine. Sales volumes of nitrogen-based fertilizers increased 37.9% to 600,000 tonnes, and combined phosrock and nepheline rose 5% to 968,000 tonnes.

"The flexibility of our sales policy, which is a cornerstone of our long-term strategy, helped to minimize the impact of lower levels of activity on the Brazilian market (which we believe to be temporary) and trade restrictions in Ukraine," CEO Andrey Guryev said in the statement.

In the first six months of 2018, total fertilizer production increased 13.8% year on year to 4.5 million tonnes, largely driven by a 45.1% increase in nitrogen-based fertilizer output to 1.1 million tonnes. Phosphate-based fertilizer production climbed 6.3% to 3.4 million tonnes, and combined phosrock and nepheline grew to 5.6 million tonnes from 5.2 million tonnes.

Total sales volumes for the first half improved 14.8% year over year to 4.7 million tonnes.

Guryev said the company remained upbeat on pricing in August through October. Aside from strong demand in India for diammonium phosphate, PhosAgro said there may be additional upside to current price levels due to the onset of the autumn season in Russia, Europe and North America and seasonal demand recovery in Brazil.

The company noted that monoammonium phosphate exports to Brazil plummeted in the first half by 40% year over year.