Brazilian MAP prices holding despite surge in P2O5 stocks
Yara’s revenue and other income during the first quarter of this year saw significant increases, climbing to $3.14bn versus $2.85bn in Q1 2020, the company announced in its Q1 2021 results today.
The producer’s net income was at $14m. during the first quarter of this year, versus a net loss of $119m. during the same quarter of 2020.
While natural gas prices gained over the period, the improved pricing for nitrogen-based products more than offset the rising feedstock costs, the company stated. Yara’s first-quarter EBITDA excluding special items were up 16% as a result at $585m.
The firm noted that the significant increase in nitrogen fertilizer prices compared to a year ago reflected both stronger demand and limited new supply. It stated that its industrial business has also picked up, following weaker demand during the start of the pandemic.
Yara’s global weighted average gas cost increased to $6.00/MMBtu in Q1 2021, from $4.30/MMBtu in Q1 2020. While in Europe, natural gas prices have also increased from the record lows reached in 2020, with weighted average costs climbing to $6.90/MMBtu in Q1 2021, from $4.50/MMBtu during the same period of last year.
The producer predicts gas costs for the second and third quarter 2021 at $180m. and $220m. higher than a year earlier, however, the estimates may change depending on future spot gas prices and local terms.
Yara’s ammonia production has fallen to 1.79m. tonnes in Q1 2021, versus 1.92m. tonnes in Q1 2020. Urea production also declined over the period to 1.17m. tonnes from 1.51m. tonnes, while production of nitrates increased year-on-year, climbing to 1.64m. tonnes from 1.53m. tonnes.
While higher nitrogen supply growth is expected in 2021, Yara noted that there has been limited start-up activity seen so far this year, and the risk to project delays remains stronger than normal due to disruption caused by Covid-19.
By Neha Popat, Nitrogen Market Reporter
Related News
