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. Last Updated: 07/27/2016

UralChem and Acron Cease Production on Supply Cutoff

UralChem and Acron said they stopped production after potash miners including Silvinit cut off supplies.

Several Acron and UralChem production lines reduced output or shut down after receiving no potash deliveries in July, the companies said Wednesday in a joint statement. Russian potash miners have yet to sign any short- or long-term contracts for delivery, the statement said.

Silvinit sells 20 percent of its output to Russian consumers and domestic rival Uralkali 10 percent, exporting the rest for at least triple the price. Acron and UralChem said they plan to ask the government, which caps domestic prices to help farmers, to establish export quotas, leaving more potash for sale in Russia. Silvinit is asking for higher prices from all three companies, Acron said.

“Silvinit told the three producers that it has 200,000 tons of potash until the end of the year for our plants, when we alone need 450,000 tons each year,” Acron spokeswoman Yelena Kochubey said Wednesday. Anton Subbotin, spokesman for Silvinit, could not immediately be reached for comment.

Silvinit, Russia’s biggest potash producer, supplies UralChem and Acron, the country’s second- and third-largest makers of nitrogen-based fertilizer, with the mineral — which is combined with phosphate and nitrogen to make so-called complex fertilizers. Uralkali, Russia’s only other potash miner, supplies EuroChem, the country’s biggest fertilizer maker, and PhosAgro.

Uralkali said it is “surprised” by the comments from Acron and UralChem, as potash producers and fertilizer makers have agreed to resolve the situation with deliveries by Sept. 1, the miner said Wednesday. Talks are ongoing, the company said.