OSTCHEM plants produced 918.5 thousand tons of fertilizers in H1

Output volumes decreased by 4.3% y/y, mainly due to uncontrolled import of relevant products

In January-June 2024, OSTCHEM nitrogen holding (part of Group DF) reduced mineral fertilizer production by 4.3% compared to the same period in 2023, to 918.5 thousand tons. This is reported by Interfax-Ukraine with reference to the company’s data.

“Uncontrolled imports cause the greatest damage to the chemical industry. Due to the dominance of cheap fertilizers from countries friendly to Russia, production volumes fell by 4.3%,” said Sergiy Pavlyuchuk, Production Director at OSTCHEM.

Other negative factors include energy supply restrictions and staff shortages.

“In addition to power outages due to the destruction of the energy infrastructure, there is also a shortage of personnel: since the beginning of the full-scale war, almost 20% of employees have been mobilized at the plants, there is a staff shortage of about 15%, and we are forced to retrain personnel who are learning new specialties,” Pavlyuchuk said.

Cherkassy Azot produced 717.8 thousand tons of products in the first half of the year and remained the largest mineral fertilizer producer in Ukraine. Rivne Azot maintained its production volumes at the same level as last year – 207 thousand tons.

High levels of dumped imports resulted in a drop in domestic production of the most popular fertilizers in Ukraine – ammonium nitrate and urea. In particular, OSTCHEM’s plants reduced ammonium nitrate production by 9% y/y – to 362.9 thousand tons. Urea output fell by 10.8% y/y – to 183.6 thousand tons.

At the same time, the holding was able to strengthen its position in the urea-ammonia mixture (UAN) market, with production volumes up 11.4% y/y over 6 months to 309.2 kt. To meet the growing demand, new UAN production sites are being launched at Cherkasy Azot (capacity of 1 million tons per year) and Rivne Azot (300 thousand tons per year).

The total imports of nitrogen fertilizers to Ukraine in the first half of 2024 amounted to 1.298 million tons. In particular, ammonium nitrate – 176.6 thousand tons, urea – 311.3 thousand tons, NPK – 108.5 thousand tons, sulfate – 159.8 thousand tons, NP – 77.71 thousand tons, KAC – 50.8 thousand tons.

In 2023, OSTCHEM plants increased their fertilizer production by 19.5% y/y. Last year, Cherkassy Azot produced 1.56 million tons of mineral fertilizers, up 39.6% y/y, and Rivne Azot produced 528 thousand tons (-10.8% y/y).

OSTCHEM is a nitrogen holding of Group DF that unites the largest mineral fertilizer producers in Ukraine. It includes Rivne Azot, Cherkassy Azot, Severodonetsk Azot and Stirol (which are not in operation and are located in the occupied territories).