The plants of nitrogen holding Ostchem produced 520.6 thousand tons of mineral fertilizers in the first quarter of 2024, which is only 1% more than in the first quarter of 2023 (515.5 thousand tons), the holding said in a statement on Wednesday.
“The growth in production of the Ukrainian chemical industry has stopped due to the uncontrolled growth in fertilizer imports from Poland, as well as Russia-friendly Azerbaijan and Turkmenistan,” the company said.
According to the company, in the first quarter of 2024, fertilizer imports increased by 35% to 701.2 thousand tons.
It is specified that Cherkasy Azot produced 404.3 thousand tons in January-March this year, while Rivne Azot produced 128 thousand tons of fertilizers.
According to the report, the production structure remains fairly stable: ammonium nitrate is the leader (246 thousand tons produced), followed by urea-ammonium nitrate (UAN) (123.8 thousand tons) and urea (123.5 thousand tons). Production of limestone-ammonium nitrate (LAM) increased slightly year-on-year to 15.8 thousand tons, and ammonia to 9.08 thousand tons.
Ostchem noted that it met its obligations in full during the spring sowing season, but in 2024 the negative industry trend intensified, with fertilizer imports significantly exceeding domestic production.
“In the first quarter of 2024, imports amounted to 701.2 thsd tonnes, exceeding domestic production by 35%. Imports continue to kill domestic production: four fertilizer producers have already been shut down – OPP, Dniproazot, Rivneazot and Sumykhimprom,” commented Oleg Arestarkhov, Head of Corporate Communications at Group DF.
It is noted that Ukrainian producers continue to lose ground in the Ukrainian market in most fertilizer segments, except for UAN.
“First of all, Ukrainian chemical plants are dramatically losing the urea market: in the first quarter, Ukraine produced 123.5 thousand tons of urea, while imports amounted to 181 thousand tons. 88% of all imported urea came from Azerbaijan and Turkmenistan, countries friendly to Russia,” Arestarkhov added.
According to him, Poland is also strengthening its position as the largest importer of fertilizers to Ukraine, as it is currently flooded with cheap Russian and Belarusian fertilizers that are not subject to EU sanctions, which is why all the excess fertilizers from the Polish market are being redirected to Ukraine.
According to Ostchem, in 2023, Poland imported 1.016 million tons of urea, of which urea from Russia accounted for 34% (345 thousand tons). At the same time, in the first quarter of 2024, Poland has already become the undisputed leader among importers of such fertilizers as ammonium nitrate (52 thousand tons out of 109.7 thousand tons of total imports), ammonium sulfate nitrate (7.9 thousand tons out of 9.4 thousand tons), UAN (17.4 thousand tons), and NPK (63.2 thousand tons out of 144.3 thousand tons) in the Ukrainian market.
In the first quarter, Ukraine imported 121.9 thousand tons of sulphate (China is the leader with 75.3 thousand tons) and 74.6 thousand tons of superphosphate (Bulgaria – 37.3 thousand tons and Greece – 27.4 thousand tons),
“Unfortunately, behind the loud slogans of Ukrainian government officials within the Buy Ukrainian campaign, there are no practical steps to reduce imports and protect the Ukrainian fertilizer producer,” Arestarkhov emphasized, recalling the specific proposals of the Ukrainian Chemists Union to protect the domestic market that were submitted to the government.
Ostchem is the nitrogen holding of Dmitry Firtash’s Group DF, which unites the largest mineral fertilizer producers in Ukraine. Since 2011, it has included Rivne Azot and Cherkasy Azot, as well as Severodonetsk Azot and Stirol, which are out of operation and located in the occupied territories.
Cherkasy Azot PrJSC (Cherkasy, Ukraine) is one of the largest Ukrainian chemical companies. Its design production capacity is 962.7 thousand tons per year of ammonia, 970 thousand tons per year of ammonium nitrate, 891.6 thousand tons of urea, and 1 million tons per year of UAN.
Rivne Azot is one of the largest Ukrainian chemical companies in Western Ukraine. On April 12, 2024, Group DF and South Korean Hyundai Engineering signed an agreement to build a chemical hub in Rivne. The project envisages the construction of green ammonia and hydrogen plants based on renewable energy sources; new enterprises and production sites for nitrogen fertilizers and chemical derivatives.
