其他服務業Business News

Fertilizer producers have taken up the organization of logistics in Russia after the closure of ports of neighboring countries for them. 

Transshipment of fertilizers for export in the Russian ports of the Baltic basin in the first quarter of 2024 increased by 43% year-on-year and amounted to 7.7 million tons. This is reported in the materials of the Association of Commercial Seaports (AMTP), which were reviewed by Vedomosti.

The Baltic Basin includes the Large Port of St. Petersburg, as well as ports in Ust-Luga, Vyborg, Vysotsk, Kaliningrad and Primorsk. In January – March, most of the fertilizers were shipped through them for export abroad. The total export of this nomenclature through all Russian ports over the past three months amounted to 9.07 million tons – 22% more than a year earlier.

For comparison, the transshipment of fertilizers through the ports of the Arctic basin increased by 3% to 720,000 tons over the same period, and the Azov-Black Sea Basin (ACHB) halved to 650,000 tons, according to the materials of the association. An increase in the volume of fertilizer transshipment in the ports of the North-West was confirmed to Vedomosti by a representative of the Ministry of Industry and Trade. According to him, this is due to the entry of Russian exporters into the markets of Africa and Latin America.

Transshipment of mineral fertilizers in the Baltic basin

Year	Volume in mln tons
2020	12.12
2021	12.51
2022	17.66
2023	29.64
1 quarter of 2023	2.38
1 quarter of 2024	7.7

Source: Association of Commercial Seaports statistics.

The export of fertilizers through Russian ports in the Baltic began to grow actively in 2022. During that year, transshipment increased by 36% to the level of 2021 to 17 million tons, and in 2023 – by another 74% year-on-year to 29.7 million tons, according to the AMTP data.

Prior to the start of its operations in Ukraine in 2022, Russian companies exported part of the fertilizers through the ports of neighboring countries. For example, Akron owns terminals in the Estonian ports of Muuga and Sillamae with a total capacity of 1.5 million tons of ammonia, 1.85 million tons of urea-ammonia mixture and 2.5 million tons of dry cargo per year. But in 2022, against the background of sanctions, the Baltic States restricted access to their ports for Russian companies. As a result, fertilizer producers had to reconfigure logistics to ports in Russia.

In March 2024, the government banned the transshipment of ammonium nitrate in the Large Port of St. Petersburg for security reasons. In return, the Ministry of Finance proposed to allow the transshipment of these products in Arkhangelsk, whose port has a license for this and the technical capability to ship such products. The capacity of this port is not enough to replace the lost volumes (more than 3 million tons per year) and the companies are also considering other options for the transshipment of saltpeter, the interlocutors of Vedomosti said. The impact of the ban on the transshipment of ammonium nitrate in the Large Port of St. Petersburg on the total export shipments will depend on several factors, including which ports supplies will be redirected to, says a representative of the Ministry of Industry and Trade. According to him, the agency is currently working on this issue together with the Ministry of Transport.

This restriction will not have a noticeable impact on the dynamics of exports of products in general, believes a source of Vedomosti familiar with transshipment statistics. Nina Adamova, an analyst at Gazprombank's Center for Economic Forecasts, agrees with him. According to her, ammonium nitrate accounts for only 7-10% of Russian fertilizer exports. At the same time, the export potential of the industry is large, and demand abroad is high in the context of lower prices, she notes.

Saltpeter transshipment in the first quarter has already had a limited impact on the performance of the port of St. Petersburg, because in fact it has not been carried out since February, said Mikhail Burmistrov, CEO of Infoline Analytics. According to him, a very favorable export environment has formed for mineral fertilizers and price dynamics will remain positive.

The total export of fertilizers from Russia in 2024 will remain at the level of last year, the source of Vedomosti expects. At the end of 2023, the President of the Russian Association of Fertilizer Producers (RAPU) Andrey Guryev said that the export of these products in 2023 returned to the level of 2021. At that time, the volume of deliveries abroad amounted to 37.5 million tons in physical weight.

Transshipment of fertilizers at the northwestern terminals of Global Ports (part of the Delo group) in 2023 increased almost 3 times in annual terms to 2.2 million tons, a representative of the company told Vedomosti. He did not provide data for the first quarter of 2024. The key factors in the growth of transshipment were the increase in fertilizer production in Russia, the restructuring of logistics chains of exporters and the development of port facilities in the Northwest. According to the company's estimates, the growth of fertilizer transshipment through the Baltic ports will continue in 2024.

The capacities of the Baltic ports are the main resource for increasing fertilizer exports from Russia, they already account for three quarters of shipments abroad, says Boris Krasnozhenov, head of the Securities Markets Analytics Department at Alfa Bank. Exports from here are geographically beneficial for companies that have production facilities in the region, for example, Phosagro and Eurochem have assets located in the Leningrad Region, he points out. Transit through Belarus (which, like Russia, lost access to European ports) also allowed to increase exports through these ports, Krasnozhenov clarifies.

The increase in shipments to ports in the Baltic was also facilitated by the agreement signed at the end of 2023 on the transshipment of 3 million tons per year of fertilizers in the port of St. Petersburg, adds Yakov and Partners Director Egor Bespyatov. We are talking about the agreement between Global Ports and Phosagro for 2024-2028.

The infrastructure of the ports of ACHB and the Caspian Sea is not sufficiently developed for transshipment of fertilizers, Krasnozhenov points out. Russian exporters can supply products by rail to China, but it is necessary to take into account the limited capacity of the Eastern Landfill (BAM and Transsib) and border crossings, as well as the shortage of terminals for transshipment of fertilizers in the Far East, he notes. The Arctic route has a natural limitation on navigation time, as well as similar problems with railway capacity, the analyst adds.

At the same time, the Tolyattiazot terminal (controlled by Uralchem) for ammonia transshipment in Taman should be launched in the second quarter of 2024, Deputy Minister of Industry and Trade Mikhail Yurin said at the end of January. The terminal's capacity will be 3.5 million tons of ammonia and 1.5 million tons of urea per year.

Source: https://www.vedomosti.ru/business/articles/2024/04/17/1032299-eksport-rossiiskih-udobrenii-iz-portov-baltiki-viros?utm_campaign=newspaper_17_4_2024&utm_medium=email&utm_source=vedomosti