Moscow. 26 Oct. INTERFAX – the European Parliament approved restrictions on the content of cadmium in phosphorous fertilizers, which ultimately will create advantages for the Russian producers, PhosAgro, Acron and EuroChem – in the supply of the European market, the report says Raiffeisenbank analyst Konstantin Yuminov.
Approved options – more soft time than was originally discussed. The ban on circulation of fertilisers with a cadmium content above 60 mg/kg will be introduced immediately after the entry into force of the new requirements, above 40 mg/kg in 6 years (not 3 years as planned), above 20 mg/kg – 16 years (instead of 12). The new requirements must be approved by the EU Council.
The immediate market impact of the restrictions will not have a ban on the turnover of phosphate fertilizers with a cadmium content above 60 mg/kg will affect only 4% of the total volume of supply on the European market (mainly from Egypt and Togo). The next stage of restrictions will affect a third of current supplies to Europe (the volumes from Algeria, Senegal, Tunisia and Israel).
If you limit to 20 mg/kg, the European market is closed for most manufacturers outside of Russia, including the largest supplier of Apatite concentrate and phosphate fertilizers in the European Union – Moroccan OCP (the content of cadmium in Moroccan ore from 28 to 88 mg/kg). Would threaten about 65% of supply to Europe, said Yuminov.
Europe imports about 90% of phosphate rock for production of phosphate fertilizers. Significant amounts come from countries with ore of sedimentary origin with a high content of heavy metals (primarily countries in the Middle East and North Africa). In Russia, however, produces phosphate rock of volcanic origin with a low content of harmful impurities. The largest Russian supplier of Apatite concentrate and phosphate fertilizers on the European market is “FosAgro”.
Ore from South Africa must also meet the final limits, but its share in supplying the European market is small.
Theoretically, the major suppliers of phosphate fertilizers in Europe, such as OCP, can build an installation for the removal of cadmium from the ore. However, until the technology has found application on an industrial scale, and the cost of this process will amount to 10-20% of the price of fertilizer, the report says.
The negative decision of the European Parliament for the Polish fertilizer producer Grupa Azoty, to 20% which belongs to the Russian “Akron,” said Yuminov. Grupa Azoty buys phosphate rock from North African producers. The entry into force of the final restrictions in the 20 mg/kg will cause the company to shift to purchasing a more expensive ore from other suppliers, which may reduce its competitiveness, says the review. “Akron” after the purchase of shares in the Polish company said Germany was ready to put her Apatite concentrate, however, faced with the conflict around that asset and raw materials in Poland does not deliver.
PhosAgro plans to create a premium brand for export to Europe fertilizers with low heavy metal content, new “green” brand may appear in 2018, said earlier the Director of marketing of the company Irina Evstigneeva. The cadmium content in the ore PhosAgro – less than 0,2 mg / kg.