Ammonia Output Up 2% Despite Gas Trouble.

Ukrainian fertilizer producers increased ammonia production by 2% yoy in 1H06, while ammonia nitrate was down 11% yoy. Stirol (STIR: HOLD) recorded the highest increase in ammonia output, 12% yoy, while Rivneazot increased output by 4%, Severodonetsk Azot and Dniproazot (DNAZ: HOLD) by 3% each, Odessa Portside’s output was flat, and Cherkasy Azot (AZOT: BUY) decreased production by 13%. Vladimir Nesterenko: Remarkably, ammonia production is up even despite last year’s high comparison base and all the problems with price and availability of gas this year. It seems it is a good strategy to produce as much ammonia as possible at current gas prices, before they increase further. We expect slower growth later this year, depending on the availability of gas.The decrease in ammonia nitrate output is due to Cherkasy Azot having shut down its production for a major overhaul.