1H Urea Production Down 1%.

Ukrainian chemical plants decreased urea output by 1% yoy in 1H06, to 1803 ths mt. All three traded companies decreased their output volumes: Stirol (STIR: HOLD) by 3%, Dniproazot (DNAZ: HOLD) by 1%, Cherkasy Azot (AZOT: BUY) by 6%. The two other producers, Odessa Portside and Severodonetsk Azot, increased output by 4% each. Vladimir Nesterenko: The half-year dynamics reflect the fact that world market conditions this year have made it more favorable to produce raw ammonia than urea or ammonia nitrate. The average ammonia price (FOB Yuzhny) was up 18% yoy in 1H06, while the average urea price increased a mere 2.5%.