In the first quarter of 2015, revenue from sales of key fertilizer products increased by PLN 75.5m, whereas revenue from chemical products decreased slightly, by PLN 6.5m.
The largest share of the Company’s revenue (PLN 756m) came from the domestic market. On the European market, the largest contributors to revenue, totalling PLN 220m in the first quarter, were the United Kingdom, Germany, Czech Republic, and France. Revenue from Asian markets reached PLN 92.5m, with Taiwan and China as the largest contributors.
The Company’s output of nitrogen fertilizers in pure nitrogen equivalent increased by 5% year on year, whereas ammonia and caprolactam volumes were up 3% and 2%, respectively. NOXy output fell 4% and melamine production volumes decreased by 5%. Hydrogen peroxide output remained stable year on year.
Nitrogen fertilizers market
Good weather conditions at the end of February and in March 2015 encouraged early application of fertilizers by farmers, which gave a strong boost to demand for mineral fertilizers.
Melamine market
The demand, supply and pricing situation on the melamine market was stable in the reporting period. The coming quarter is expected to see a slight increase in prices caused by reduced supply resulting from scheduled overhaul shutdowns, the need to rebuild stock levels and growing demand from both local and global customers.
Caprolactam market
In the first quarter of 2015, in every region of the world the average prices of caprolactam showed a downward trend year on year. Caprolactam prices were driven chiefly by strong declines in benzene prices in the first half of the quarter and their subsequent recovery at the end of the period. In Europe, higher caprolactam consumption was recorded in the automotive and textile industries. The European and Asian markets continue to be oversupplied on the back of dynamic growth of caprolactam production in China. Despite a challenging market environment, demand was stable in all caprolactam processing segments. Caprolactam producers from Central and Eastern Europe have started to invest in projects that will enable them to produce polyamide 6 internally and sell the finished product to customers in Europe.
A further increase in caprolactam demand in Europe is expected in the second quarter of 2015 as the high season in industries purchasing the product is approaching. Prices are also expected to rise if an upward trend in raw material prices occurs.
Hydrogen peroxide market
In the first quarter of 2015, European contract prices of hydrogen peroxide increased by 2.7%. The European market remained balanced. No major changes in the demand for hydrogen peroxide or hydrogen peroxide prices are expected in the next quarter.
AdBlue® (NOXy®) market
The Adblue/NOXy® market keeps expanding with the growing number of vehicles which meet the Euro 6 exhaust gas emission standards. Consumption in Europe in the quarter is estimated at some 600,000 tonnes, which is nearly 20% more than a year ago. The number of service stations in Europe offering AdBlue is also on the rise, having increased 17% year on year. The average prices in the automotive segment of the European market of exhaust reduction are expected to remain stable in the following quarter.