Ostchem, the nitrogen division of Group DF owned by Ukrainian businessman Dmytro Firtash, produced 1.57 million mt of fertilizer in the first nine months of 2023, a 92% increase from the 817,500 mt produced during the same period last year, Group DF reported on Oct. 31.
Ostchem’s plants are located in Ukraine. Of the total fertilizers produced in the period, urea production was up 202% year-over-year, UAN was up 150%, and ammonium nitrate was up 89%. However, production of LAN fell by 72%, to 36,900 mt. Ostchem’s Cherkasy Azot plant produced 1.2 million mt of fertilizers, a 148% increase from last year, while the Rivneazot plant’s output increased by 7%, to 347,300 mt.
“After a sharp drop in production volumes in 2022, our plants are gradually resuming their activities,” said Sergey Pavlyuchuk, Head of Ostchem’s nitrogen business. “At the same time, we have not yet managed to reach the pre-war level.”
Pavlyuchuk said the plants did not exceed 70-80% of their production capacity during the period due to a surge in fertilizer imports into Ukraine, but capacity was utilized more evenly than in 2022. He added that peak demand is in November-December with the start of purchasing for spring planting in 2024.
According to Oleg Arestarkhov, Group DF’s Head of Corporate Communications, the total volume of fertilizer imports into Ukraine during the period reached 1.71 million mt, “indicating the volume of imports exceeds domestic production.”
He said more cheaply priced fertilizers continue to be imported from countries “friendly” to the Russian Federation, including “repackaged” Belarusian fertilizers brought to Ukraine via Poland and Romania. He also noted the import of urea from Turkmenistan is growing “at a critical pace.” Group DF believes Ukrainian producers “are losing the urea market,” he said.
Urea imports from Turkmenistan increased to 230,000 mt in the first nine months, up from 55,000 mt in full-year 2022 and just 22,700 mt in 2021, the group said, citing data from Ukraine’s State Customs Service.
“Meanwhile, Ukraine’s largest chemical plants that produce urea are standing idle for the second year,” Arestarkhov said. “This indicates the quality of industrial policy, which must be corrected without delay to stimulate the growth of production.”
The selling price of fertilizers imported from FSU countries, accounting for logistics costs, “contradicts all market laws,” Arestarkhov said.