LSB Industries Inc., Oklahoma City, told analysts on Feb. 25 that the company has pushed back a planned turnaround for its Pryor, Okla., Nitrogen facility in 2021 to next year. As a result, the company now expects to have only one major turnaround per year, with its three major plants on three-year cycles.
Despite positive market conditions, LSB said it would continue with its planned 30-day turnaround at Cherokee, Ala., in the third quarter. LSB said the outage will cost it some 15,000 st of ammonia, as well as some downstream production of UAN and industrial products. Turnaround expenses are expected to be $10 million, and the company will have capital expenditures across the three plants of $30 million.
In addition to being upbeat about the ag market, the company also pointed to positives for its industrial and mining products. It expects to continue to focus on the upgrade of ammonia into higher-value downstream production in 2021, with the ramp-up of nitric acid as a result of a previously-reported seven-year offtake agreement (GM Oct. 9, 2020). Under the agreement, LSB will supply between 70,000 to 100,000 st of nitric acid per year. Sales were expected to begin in the first quarter 2021.
The company also expects new contract awards, coupled with further recovery from COVID-related impacts to result in higher volumes of industrial and mining sales volumes.
President and CEO Mark Behrman pointed to favorable indicators for the company’s low-density ammonium nitrate from the sizeable North American copper market, where prices for the metal have risen to the highest levels in almost 10 years.
In other news, LSB said its lawsuit against Leidos, the major contractor for its El Dorado, Ark., ammonia plant, has been pushed back to this fall (GM March 16, 2018). LSB has alleged damages of over $100 million. The company has allotted some $4 million this year for legal fees to cover the litigation.