Russia Metals and Mining, Fertilizers

Eurochem to sell a part of its shares of MMTP to SUEK for more than $5 mln

Prior to the deal Eurochem owned 37% of the shares of the port, SUEK- 39.3%.

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Eurochem wants to create a potash production worth 72 billion roubles near Perm in 2018.

In 2018 Mineral and Chemical Company (MCC) "EuroChem" planned to create potash production in the Perm region, the cost of the organization of which is estimated at 72 billion roubles, the

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Uralkaly takes loan from Sberbank

Uralkaly, which actively develops its capacity after the accident at mine in November 2014, has attracted $1.5 billion from Sberbank for investments and debt refinancing. Through until 2020, the company plans to invest 300 billion rubles in the production, at the end of June its debt amounted to about $3.5 billion. The current ratio of the net debt/EBITDA is 1.8, but taking into account the buyback it may increase to 2.6.
Uralkaly has attracted a non-revolving line of credit from Sberbank to the amount of $1.5 billion for five years. As the company specifies, the money will be also spent for financing of statutory activities, cost of production and sales, total or partial refinancing of current loans and payment of dividends. "The advantage of the deal is that the funds will be provided on an unsecured basis, and the company is not obliged to use the whole amount of the credit line," - Uralkaly noted. The limit of the credit line is differentiated by time and tied to the cash flow projections and the need for credit resources of the company. In the period from September 2015 till May 5, 2016, it is $300 million, till July 5, 2016 - $600 million, till September 4, 2016 - $1 billion, and until March 3, 2017 - $1.5 billion.

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In January-June, export of plastic products in Russia grew by 15.4%

According to customs statistics, in January-June 2015, foreign trade turnover of Russia made up $270.7 billion and it decreased by 32.6% in comparison with January-June 2014. The trade balance showed a surplus of $95.3 billion, which is by 16.7 billion less than in January-June 2014.
In January-June 2015, the export of Russia amounted to $183.0 billion, decreased by 28.8% as compared with January-June 2014. In January-June 2015, the basis of the Russian export to the non-CIS countries was fuel and energy products, the share of which in the commodity structure of the export to these countries amounted to 68.1% (in January-June 2014 - 75.3%).
In January-June 2015, the cost volume of energy products decreased by 34.5% as compared with January-June 2014, and the physical - increased by 10.3%. Among the energy goods the volume of exports of crude oil increased by 11.5%, electricity - by 25.0%, oil products - by 20.2%, including: kerosene - by 39.3%, diesel fuel - 18.0%, liquid fuels - by 23.5%. At the same time, the export volume of natural gas was reduced by 4.1%, coal - by 1.2%.

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Uralkalii quits the stock exchange after another buy back

On August 24th the Board of Directors of Uralkalii will consider the recommendation of the Audit Committee concerning the saving of its listing on the LSE as well as on opportunity of starting a new buyback program.
 
Comments
V. Tanukov, analyst of IK “Veles Capital”.
We don’t forecast the decision of the Board upon the issue of its listing and buyback. We only say that the expectations of a possible buyback are present in the company’s listing which has recently showed a significant growth, and in the case the expectations are not met, there is a high opportunity of a sharp fall of listing.

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The Stavropol region develops its own program of import substitution.

Draft Agenda for the issue of import-substituting products for 2015-2020 was developed in the Stavropol region, the press office of the governor of the region informs.
In the short term the region may offer the domestic market import-substituting products, including passenger cars - about 20 models and modifications of Chinese car brands; steel building armature; melamine, a new brand of polyethylene and polypropylene; complex mineral fertilizers, the report informs.

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State support not always helps car industry

The actual victory of metallurgical companies in the recent conflict with machine builders because of a sharp rise in prices for rolled metal at first glance looks like a surprise. Market accustomed that the state generously supports the auto industry in crisis - for example, this time the company lined up for government guarantees, the Government has already allocated 23 billion rubles for recycling, not is the line of start of preferential car loans and leasing subsidy.
Against the background of this direct burden on the budget it would be logical to assume that the state will find an instrument of pressure on the rich metallurgical companies that, revenue of which grew due to the devaluation of the ruble. In addition, in 2011, automakers actually won in the previous price war: with the support of Igor Sechin, the Deputy Prime Minister then, they signed an agreement on favorable pricing formula. And in a similar dispute with the producers of fertilizers, the state recently succeeded in freezing domestic prices. But in the end, despite the claims of the Industry and Trade Ministry and the Federal Antimonopoly Service on the possibility of introduction of export duties on rolled metal, machine builders signed agreements on supply of metal with growth in prices by 30-60%.

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Innovation technology of rare earth metals production has been created in Russia

The output of rare earth metals in Russia is almost absent despite of the potential demand from the part of domestic and foreign companies. The reasons are the extremely difficult and expensive methods of their production, absence of industrial production though in Russia there is a technology of extraction of rare earth metals out of phosphorous acid – a semi-product of processing of apatite concentrate.
“This technology is based on the sorption extraction of rare earth metals’ combinations out of wet-process phosphoric acid at a special machine installed in the cycle of production of mineral fertilizers by the sulfur acid scheme with further extraction cleaning and separation of rare earth metals. Such production differs by its effectiveness due to the absence of necessity to found a mining and  processing plant, development of transport and logistics schemes as well as the absence of radioactivity and necessity of waste burial, that is typical to rare earth metals extraction out of other raw materials sources. 

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Cargo shippers oppose growth of Russian Railways’ tariffs

The possibility of the increasing of freight railway tariffs by 10% in 2015 has made industrialists seriously anxious. According to the Kommersant’s information, dozens of cargo owners have appealed to the Government and the presidential administration with a request not to index the rates above 7.5%, otherwise they threaten to cut coal mining, metal and mineral fertilizers production. Russian Railways claims that taking into account the freezing of tariffs in 2014, the transport costs of the shippers will rise insignificantly.

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FosAgro and UC Rusal to provide for each other on long-term basis

Contracts on supply of aluminum fluoride and raw materials for its production have been concluded between FosAgro-Cherepovets (a part of FosAgro) and UC Rusal within cooperation agreement for a period till 2034.
The first contract provides for supply of aluminum fluoride, made by FosAgro-Cherepovets, to UC Rusal till December 31 of 2034. The approximate amount of the deal will exceed 20 billion rubles.

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