Export castling

Foreign fertilizer shipments through the JSC «RZD» network increased by 16.5% in 10 months. This was made possible by the railway’s rhythmic work and world price conditions.

Total 29.3 million tons of fertilizer were exported in January-October, which is 16.5% more than the same period last year, according to operational data of the holding. Most of the amount is in the direction of ports in the Northwest - 21.5 million tons (growth by 24.9%). In the ports of the South 3.3 million tons (increase by 7.9%) and to the Far East - 128 thousand. tons (increase by 1.8 times).

«Export of fertilizers from Russia traditionally tends to the ports of the Northwest and South due to the geographical location of production capacities», - explained the senior analyst of the Center for Price Indices (CEC) Roman Shagalov. In his opinion, in 2024 fertilizers became one of the few categories of cargo that increased loading on the network of JSC «RZD». This is confirmed by the holding’s data: in 10 months of this year, the loading of fertilizers grew by 6.1% - to 55.9 million tons. 

The growth is not only due to good demand, but also to the capacity of the railway for export: the transport of fertilizers has been increased by reducing coal exports in the western direction. In the context of increasing foreign demand exporters can transport fertilizers to the Baltic not only in hopper wagons, but also in special containers, adds the expert.

Today, the market does not have expectations that coal will be able to recover or at least maintain current export volumes through the ports of the Northwest and South. Against this background, the freighted transport capacities to the Baltic and Azov-Black Sea basin are used for fertilizers», - explained Roman Shagalov. According to his assessment, the increase in transport through the North-West, including through Murmansk, looks most expected: there are several major projects for the development of port facilities for the transfer of fertilizers.

According to the IRC, fertilizer exports are growing due to increased production in Russia and demand in foreign markets. Thus, there is a high demand for potassium products in the context of lower prices and an increased presence of Russian companies in Asian markets.

The growth of carbamide production and exports in recent years is observed against the background of problems with the export of other gas-chemical products (ammonia, methanol) and high global demand for nitrogen fertilizers. According to the CEC, the average price of Urea carbamide on the Baltic Sea FOB base is currently $304 per ton, which is roughly in line with the average price level for 2023 but 40-50% below the 2021-2022 average. 

According to IRC estimates, in 2024 Russia maintains the world leadership in cost of production of carbamide. Export earnings from sales of this type of nitrogen fertilizer are well above the total costs of production and delivery. Given the high cost of natural gas for European industrial consumers, the high competitiveness of Russian production and the relatively close logistics of the EU country remain the most advantageous market for nitrogen fertilizers from Russia.