MOSCOW: PhosAgro, world’s leading vertically integrated phosphate-based fertilizer producer, announced that its 4Q 2019 fertilizer sales volumes increased by 16% year-on-year to 2.3 million tonnes.

Total fertilizer production in 4Q 2019 increased by 2.8% year-on-year to 2,358.9 kt. Fertilizer and feed phosphate output for FY 2019 grew by 6.1% year-on-year to a record 9,521.8 kt.

Phosphate rock and nepheline concentrate production in 4Q 2019 rose by 3.2% year-on-year to 2,897.0 kt. For FY 2019, the output of phosphate rock and nepheline concentrate was up by 5.8% year-on-year and reached 11,694.7 kt.

Sales of phosphate-based fertilizers in 4Q 2019 grew by 16.6% year-on-year to 1,738.4 kt. Sales of phosphate-based fertilizers for FY 2019 increased by 9.4% year-on-year and reached 7,255.0 kt.

Sales of nitrogen fertilizers in 4Q 2019 rose by 14.5% year-on-year and amounted to 537.1 kt. Sales of nitrogen fertilizers for FY 2019 increased by 0.1% year-on-year and amounted to 2,197.3 kt.

Sales of phosphate rock and nepheline concentrate in 4Q 2019 grew by 4.6% year-on-year and amounted to 1,152.9 kt. For FY 2019, sales of phosphate rock and nepheline concentrate increased by 12.6% year-on-year and amounted to 4,446.2 kt.

Commenting on the 4Q and FY 2019 operating results, PhosAgro CEO Andrey Guryev said: “The Company continued its steady development in 2019 by unlocking the potential created during the previous investment cycle. Stable demand in our primary sales markets during the year made it possible to increase production volumes at our production facilities, and a balanced approach to ordinary maintenance enabled us to mitigate seasonal fluctuations in sales of our end product.

“As a result, fertilizer production surpassed 9.5 million tonnes in 2019, which was fully in line with the Company’s announced production guidance. This is a record level for us.

“Fertilizer production grew together with higher production volumes of feedstocks like phosphate rock, ammonia, sulphuric acid and phosphoric acid, which enabled us to maintain our self-sufficiency in these key inputs and guaranteed our cost advantage, thus increasing our global competitive position.

“PhosAgro’s flexible sales model enabled us to increase sales in 2019 to priority sales markets. For example, sales to the Russian and CIS markets grew by more than 10% year-on-year, exceeding 3 million tonnes, and sales to the European market over the same period increased by 28% to more than 2.6 million tonnes. As a result of this growth, these markets accounted for more than 32% and 28% of total sales volumes, respectively.

“Looking at fertilizer prices in late 2019 and early 2020, I would note that the price correction we saw throughout 2019 led to a large part of global producers reaching marginal profitability levels, which made the market more rational. This has laid the foundation for price growth in anticipation of seasonal recovery in demand.”

The prices of the main phosphate-based fertilizers continued to decrease in 4Q 2019 due to the end of seasonal demand in the key markets of Asia (India) and Latin America (Brazil, Argentina), along with weak demand coming from the United States and Western Europe.

At the end of December 2019, the world’s leading producers in Morocco, the United States and China announced plans to reduce production in order to stabilise prices in global markets.

In addition, seasonal demand in the markets of Europe and North America is expected to grow in 1Q 2020, and favourable weather conditions in India will help reduce inventories and, as a consequence, lead to earlier resumption of import demand.

The affordability of fertilizers relative to prices for agricultural products will remain the main driver behind the restoration of global prices for phosphate-based fertilizers in the short term.

All of the above factors have already started supporting demand for fertilizers in January 2020 and have led to a recovery in prices for the main product groups.

Viktor Cherepov elected Chairman of PhosAgro Board of Directors