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21 November 2013

• Tampa/US price for December settled at $450 cfr, $30 drop on the November level
• Nitrochem sells 10,000 t to iTrade for OCI in mid-$380s fob Yuzhnyy
• NF Trading sells 10,000 t to Fertiberia at a price within the $420-430 fob Yuzhnyy range
• Trammo sells 10,000 t to Namhae/S. Korea at a price heard to be in low $500s cfr
• Pupuk Indonesia tenders tomorrow, 22 November, for sale of 10,000 t (+/- 10%) for shipment out of
Bontang by 6 December
• In Vietnam, the Dinh Vu plant tenders tomorrow, 22 November, for 7,000 t for mid-December arrival

OUTLOOK

Stable to softer.

KEY PRICES

21 November 14 November 7 November


Yuzhnyy fob $/t *nominal 385-425 390-395 415-425*
Middle East fob $/t 435-447 435-447 434-442.50
Tampa/US Gulf cfr $/t 450-455 480-485 480-485

AMMONIA PRICES

$/tonne
700

600

500

400

300
Caribbean
200 Middle East
Yuzhnyy
100

©FERTECON 21 November 2013


0
2009 2010 2011 2012 2013

NEW FERTECON PHONE NUMBER: +44 20 755 19790 – old numbers have now been discontinued

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New phone number +44 20 755 19790 21 November 2013

AMMONIA PRICE INDICATIONS All prices in US$

21 November 14 November 7 November

Fob prices
Caribbean 405-410 435-440 435-440
Middle East 435-447 435-447 434-442.50
Of which:
- Netbacks on contract/formula-priced sales 435-440 435-440 434-438
- Spot fob 447 447 440-442.50
Yuzhnyy/FSU fob *nominal 385-425 390-395 415-425*
Baltic/FSU 425 425 425-430
Southeast Asia 465-500 465-500 465-500
Delivered prices
NW Europe (duty paid/duty free) 480-500 480-500 480-500
NW Europe (duty unpaid) 475-490 475-490 475-490
Far East 500-530 500-530 515-549
India 475-480 472-491 472-491
US Gulf/Tampa 450-455 480-485 480-485
- Tampa 450 480 480
- US Gulf (MS, LA, TX) 455 485 485

FERTECON PRICE DEFINITION


Prices, rounded to the nearest US$, represent the last known spot business and current indications, for 4-40,000 t cargoes,
net of credit

FREIGHT INDICATIONS US$/tonne (Rates basis 1-1 unless stated)

Route Cargo size (t) Latest rate


Caribbean –Tampa/USG 20-23,000 40-45
Baltic (Ventspils) – Antwerp/Belgium 23,500 26-28
Baltic (Ventspils) – NW Europe (France) 8-15,000 47-50
Black Sea–NW Europe (excl Scandinavia) 12-15,000 80-82
Black Sea – Antwerp/Belgium 23,500 60-62
Black Sea – US (1-1 Tampa) 38-40,000 65-70
Black Sea – US (2-3 USG) 38-40,000 74-77
Black Sea – US (1-1 Tampa) 23,500 100-105
Black Sea – US (1-2 USG) 23,500 110-115
Middle East – India (1 port W. Coast) 23,500 27-33
Middle East – India (2-3 ports W. Coast) 15,000 43-50
Middle East – India (1 port E. Coast) 15,000 55-70
Middle East – India (1 port E. Coast) 23,500 45-58
Middle East - Far East (Taiwan) 23,500 75-80
Middle East – Far East (South Korea) 23,500 85-95
Indonesia - Taiwan 15-20,000 42-47

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ANALYSIS

There were two key developments in the market this week – firstly the settlement of the price between Yara and Mosaic
for contract deliveries into Tampa/US at $450 cfr, a $30 drop from the November level of $480 cfr, and, secondly, the
conclusion of two new spot deals from the Black Sea at widely varying prices.

Out of the Black Sea, Nitrochem sold 10,000 t to iTrade for OCI, for loading on the Prins Maurits at the end of November
at a price reported to be in mid-$380s fob. The second deal was the sale by NF Trading of10,000 t to Fertiberia at a price
understood to be around $420-430 fob for loading out of Yuzhnyy for delivery to Spain. Fertiberia was looking for prompt
tonnes to replace the tonnage it was unable to lift out of the Fertial plant in Algeria due to on-going problems with
customs’ regulations, and it is believed that the requirement for prompt tonnes resulted in the higher price.

There has been no new business in the Middle East this week with regular shipments underway to cover contractual
commitments, spot, and swap cargoes agreed in recent weeks.

In Algeria, the way in which customs regulations are current being interpreted has preventing ammonia vessels from
loading since early November. This seems to apply to tonnes from both the Sorfert and Fertial facilities and there are
suggestions that the restrictions may also affect loading of urea.

In the Far East, Trammo sold a new spot cargo of 10,000 t to Namhae/South Korea for December delivery to Ulsan at a
price heard to be in low $500s cfr but the price could not be fully confirmed at the time of publication.

Pupuk Indonesia tenders tomorrow, 22 November, for the sale of 10,000 t (+/- 10%) of Kaltim ammonia to ship from
Bontang/Indonesia by 6 December.

In Vietnam, the Dinh Vu DAP plant will tender, also tomorrow, for 7,000 t of ammonia to arrive in Haiphong in mid-
December.

SUPPLIERS

FSU

Black Sea – There were two new spot deals concluded in Yuzhnyy this week:
- Nitrochem sold 10,000 t to iTrade for OCI for loading on the Prins Maurits at the end of November at a price
reported to be in mid-$380s fob.
- NF Trading sold 10,000 t to Fertiberia at a price around $420-430 fob for prompt loading out of Yuzhnyy.

The higher price of the deal between NF Trading and Fertiberia is thought to reflect the urgent nature of the inquiry rather
than any significant rebound in prices. The Andesgas, which would normally load for Fertiberia from the Fertial plant is
heading for Yuzhnyy with an eta 25 November.

Aside from the usual volumes from the TOAZ plant in Togliatti, only the Rossosh and OPZ plants have an ammonia
surplus for export from Yuzhnyy but it is understood that there may be decreased availability out of Rossosh due to
increased domestic demand for ammonia for AN production. The remaining plants are unlikely to restart now with no firm
plans announced by Group DF and the cold weather conditions fast approaching.

As a result NF Trading is expecting to have just a few ammonia cargoes for December, some of which are already
allocated for contract customers.

Vessel Trader ‘000 t Destination Load date


NOVEMBER 320.1
Marycam Swan Trammo 15 Mersin/Turkey 2 November
Gas Columbia Mitsui 23.5 SFC/South Korea 3-5 November
George N Nitrochem 40 Iffco/EC India 6 November
Prins Maurits iTrade/OCI 10 Castellon/Spain and Barreiro/Portugal 8-9 November
Gas Manta Nitrochem 23.3 Antwerp/Belgium 12-14 November

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Marycam Swan Trammo 15 Gemlik (7.5) & Korfez (7.5)/Turkey 14-15 November
Gas Grouper Nitrochem 23.3 n/a Eta 23 November
Andesgas Fertiberia 10 Spain including Aviles Eta 25 November
Gas Cobia Nitrochem 23.3 n/a Eta 25 November
Gas Snapper Nitrochem 23.3 n/a Eta 25 November
Clipper Mars Nitrochem 40 n/a End November
Prins Maurits iTrade/OCI 10 Haifa/Israel End November
End November/
Gas Oriental Mitsui 23.4 Asia
early December
End November/
Clipper Orion Koch 40 United States
early December

Baltic – There has been no new known business out of the Baltic this week with the last confirmed deal being Yara’s
purchase of 7,000 t from SBU Azot (Kemerovo) at $425 fob Baltic a couple of weeks ago, the same price as Yara’s
earlier purchases.

November shipments from Baltic ports are as follows:

Vessel Trader ‘000 t Destination Load date


NOVEMBER 37.5
Coral Ivory Yara 4 Uusikaupunki/Finland 3-4 November (Ventspils)
Coral Obelia Yara 2.5 Köping /Sweden 4-5 November (Sillamae)
Rostock/Germany &
Kemira Gas Yara 8 5-6 November (Ventspils)
Uusikaupunki/Finland
Coral Obelia Yara 2.5 Köping /Sweden 8-9 November (Ventspils)
Coral Obelia Yara 2.5 Köping /Sweden 12-13 November (Sillamae)
Kemira Gas Yara 8 Porsgrunn/Norway 15-16 November (Sillamae)
Coral Obelia Yara 2.5 Köping /Sweden 17-18 November (Sillamae)
Coral Obelia Yara 2.5 n/a 21-22 November
Coral Obelia Yara 2.5 n/a 24-25 November
Coral Obelia Yara 2.5 n/a 27-28 November

CARIBBEAN

TRINIDAD: Yara settled with Mosaic for December contract deliveries into Tampa/US at $450 cfr, $30 down on the
November price of $480 cfr. As a result, contract deliveries into the US Gulf, which are linked to Tampa prices, are now
priced at $455 cfr for December. This means that netbacks to Trinidad producers on sales to the US for December will
now be around $405-410 fob.

AFRICA

ALGERIA: There are reports that the merchant ammonia line at Sorfert is currently down.

Yara’s vessel, the Nijinsky, which was originally scheduled to load ammonia from Sorfert around 2 November, in part
fulfilment of Yara’s spot purchase of 22,000 t, has been anchored at the port until 11 November due to delays rumoured
to be caused by customs regulations. The vessel loaded half the cargo from the Fertial plant, and was then due to top up
with Sorfert tonnes for delivery to Montoir/France, but customs restrictions were imposed that prevented the vessel from
loading the Sorfert onnes. There are also thought to be causing delays to urea loading.

OCI’s vessel, the Navigator Galaxy, has been anchored off Arzew since 14 November and, according to the vessel
tracking, is now heading for Bethioua. The port of Bethioua had been originally announced as the export location for
ammonia tonnes out of Sorfert with the port of Arzew planned to be the export port for urea.

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KBR has announced that it has been awarded a contract by Fertial SpA to conduct a study that will improve safety,
reliability and energy efficiency of Fertial’s two Algerian ammonia plants. The outcomes of the study will also increase the
overall ammonia production capacity by 50% and be introduced in a phase-by-phase approach. During the first phase of
the revamp project, KBR will define the technical scope and pinpoint the commercial requirements prior to licensing its
technology.

EGYPT: The OCI/EBIC plant in Ain Sukhna is currently running at 40-50% capacity. Trammo will soon load a cargo on
the Brussels for delivery to JPMC/Jordan. The vessel is expected to arrive at Ain Sukhna on 29 November.

LIBYA: Yara’s vessel, the Nijinsky, is heading for Marsa el Brega with an eta 23 November to lift 10,000 t from the
Lifeco facilities for delivery to Italy.

MIDDLE EAST

IRAN: The Gas Master has discharged 7,500 t of Iranian ammonia in India for Deepak Fertilisers at the JNPT terminal in
Mumbai on 18 November. The balance of 8,500 t, which has been delivered to PPL at Paradeep, is heard to be priced
around $478 cfr.

QATAR: There are reports that the QAFCO 5 and 6 urea plants are down. It is unclear whether ammonia production is
also affected. Muntajat has three cargoes scheduled for lifting out of the Saudi Arabia under a swap arrangement this
month in order to fulfill its contractual commitments in India:

- The Al Marona will discharge 3,500 t for Zuari at Goa on the west coast India on 23 November, followed by
5,000 t to SPIC at Tuticorin, with the balance of around 6,000 t destined for TCL at Haldia (the latter two ports
are located on the east coast India).
- The Camberley loaded 23,000 t from Saudi Arabia this week for delivery to PPL at Paradeep/east coast India at
the end of November.
- The Al Majedah will load for Muntajat in Saudi Arabia around 27 November for delivery to contract customers in
India in early December.

Mitsui will lift 16,000 t on the Gas Quantum from Qatar in early December for delivery to the Far East. The volume is in
return for the swap cargo Mitsui delivered on behalf of Muntajat to Aqaba/Jordan which loaded from the Black Sea back
in October. The vessel will also load 7,000 t from Saudi Arabia.

SAUDI ARABIA: Sabic reports business as normal with regular loading schedule from Al Jubail and Ras al Khair for
both contract customers and spot cargoes sold previously.

In November, Muntajat/Qatar will lift three swap cargoes from Saudi Arabia to supply its contract customers due to
production problems at the QAFCO plants.

There are three vessels scheduled to load in Saudi Arabia in December so far:
- Mitsui will lift 7,000 t on the Gas Quantum on 1-5 December. This is the spot deal agreed at $447 fob last week.
The balance of 16,000 t will be loaded from Qatar on the basis of a return swap from Muntajat.
- Sabic will load 23,000 t on the Sanko Independence around 4 December for delivery to SFC/South Korea. The
vessel has reportedly been fixed on a voyage charter from Trammo.
- Sabic will load 23,000 t on the Al Barrah around 10 December for delivery to its contract customers in the Far
East.

The Middle East line-up for November/December is shown below.

Price $/t cfr


Vessel Supplier/Origin ‘000 t Destination Load date
unless stated
NOVEMBER 175.5
Sabic/S.Arabia Far East including
Al Barrah 23 l-t contract 1-2 November
(Al Jubail) SFC/S. Korea
Sabic/S.Arabia Far East including 520s (440 fob
Rose Gas 23 1-5 November
(RAK) Incheon/S. Korea equiv)

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Sabic/S.Arabia
Al Jabirah 23 SFC/S. Korea l-t contract 11-12 November
(Al Jubail)
WC India: Deepak
Gas Master CIFC/ex-Iran 16 Fertilizers (7.5) & EC India PPL - 478 12-13 November
- PPL/Paradeep (8.5)
SE Asia and Far East
Trammo/ex-S.A. 442.50 spot fob
Sanko Innovator 23 including China and 14-19 November
(Al Jubail) to Trammo
Thailand
WC India: Zuari/Goa (3.5),
Muntajat/ex-S.A.
Al Marona 14.5 EC India – SPIC/Tuticorin l-t contract 17 November
(RAK)
(5) & TCL/Haldia (6)
Muntajat/ex-S.A.
Camberley 23 EC India - PPL/Paradeep l-t contract 20 November
(Al Jubail)
Sabic/S.Arabia WC India - GSFC/Sikka
Gaz Millennium 15 l-t contract 23 November
(RAK) & Hindalco/Dahej
Muntajat/ex-S.A.
Al Majedah 15 WC or EC India l-t contract 27 November
(Al Jubail)
DECEMBER 69
Mitsui/ex-S.A. Spot sale at 447
7 1-5 December
Gas Quantum (Al Jubail) Far East fob to Mitsui
Mitsui/ex-Qatar 16 Return swap 1-5 December
Sanko Sabic/ex-S.A.
23 SFC/South Korea l-t contract 4 December
Independence (RAK)
Sabic/S.Arabia
Al Barrah 23 Far East l-t contract 10 December
(Al Jubail)
RAK = Ras Al Khair

SOUTHEAST ASIA / FAR EAST

INDONESIA: Pupuk Indonesia is to tender tomorrow, 22 November, for the sale of 10,000 t (+/- 10%) of Kaltim
ammonia, to ship from Bontang by 6 December.

As reported last week, the KPA plant in currently under scheduled maintenance last week and will restart in early
December.

Vessel Supplier ‘000 t Destination Load date

NOVEMBER 30.0
TFC/Taiwan (2), Ulsan/S. Korea (7.5)
Nashwan Mitsui 15 1-3 November (B)
Japan (3.5), Vietnam (2)
Nashwan Mitsui 15 Probably Japan End November (B)
B = Bontang, L= Lhokseumawe

MALAYSIA: There has been no further update on the production rates at the Kerteh plant this week. As reported last
week, the complex went down for maintenance and the complicated interconnection of plants was causing some
problems, with ammonia only back up to about 50% of production.

The Bunga Kemboja is scheduled to load 16,500 t in Kerteh with estimated arrival on 28 November for delivery to
Thailand.

Vessel Supplier ‘000 t Destination Load date

NOVEMBER 33.0
Bunga Kemboja MSK 16.5 Miaoli (7.5) & Mizushima (9)/Japan 6-8 November
Bunga Kemboja PCG 16.5 Ube & NFC/Thailand 28 November

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OCEANIA

AUSTRALIA: The Nordic River, which left Dampier on12 November, is heading for Yara’s own facility at Glomfjord/
Norway with an eta 11 December. It is understood that this voyage is due to strategic vessel repositioning and it is
expected that the vessel will now serve Yara’s European shipping requirements.

The Viking River is due back in Dampier on 24 November.

The Pazifik is expected back in Dampier around 29 November.

MARKETS

AFRICA

MOROCCO: Nitrochem delivered 23,500 t to OCP on the Gas Grouper, which loaded in Yuzhnyy back in October and
discharged in Jorf Lasfar between 14-17 November.

Nitrochem’s vessel, the Gas Cobia, delivered a part cargo of around 12,000 t into Jorf Lasfar for OCP on 16-18
November. The remaining volume has been discharged in Tunisia.

TUNISIA: Nitrochem’s vessel, the Gas Cobia, delivered a part cargo of around 11,300 t to Gabes for GCT around 6-9
November. The remaining volume was destined for Morocco.

ASIA/OCEANIA

INDIA: West Coast: Trammo will deliver 23,389 t on the Sanko Independence to west coast India at the end of
November. The vessel will discharge 8,000 t for Deepak Fertilizers at the JNPT terminal in Mumbai on 27 November
followed by 15,389 t for Iffco at Kandla on 30 November.

West and/or East Coast: The Gas Master has discharged 7,500 t of Iranian ammonia for Deepak Fertilisers at JNPT
terminal in Mumbai on 18 November. The balance of 8,500 t, which will be delivered to PPL at Paradeep on 28-29
November, is heard to be priced around $478 cfr.

Muntajat/Qatar will deliver two cargoes, around 15,000 t each, sourced from Saudi Arabia on a swap basis:
- The Al Marona will discharge 3,500 t for Zuari at Goa on the west coast on 23 November, followed by 5,000 t
delivery to SPIC at Tuticorin with the balance of around 6,000 t destined for TCL at Haldia (the latter two ports
are located on the east coast).
- The Al Majedah will load for Muntajat in Saudi Arabia around 27 November for delivery to contract customer in
India for discharge in early December.

East Coast: Muntajat/Qatar will deliver 23,000 t from Saudi Arabia, sourced on a swap basis, on the Camberley to PPL
at Paradeep at the end of November.

$/t cfr unless


Buyer/Location Supplier ’000 t Discharge Vessel
stated
NOVEMBER 217.39
West Coast: 81.54
Trammo/ex-Algeria & Sanko
Iffco/Kandla 17.9 n/a 5 November
Egypt Independence
Sanko
Iffco/Kandla Trammo/ex-? 15.39 n/a 30 November
Independence
Deepak Fertilizers/ Trammo/ex-Algeria & Sanko
5.5 n/a 3 November
JNPT, Mumbai Egypt Independence
Deepak Fertilizers/
CIFC/ex-Iran 7.5 n/a 18-22 November Gas Master
JNPT, Mumbai

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Deepak Fertilizers/ Sanko


Trammo/ex-? 8 n/a 27 November
JNPT, Mumbai Independence
Hindalco/Dahej Sabic/S. Arabia l-t contract End November
15 Gaz Millennium
GSFC/Sikka Sabic/S. Arabia l-t contract End November
Zuari/Goa Muntajat/Qatar 3.5 l-t contract 5-6 November Al Majedah
Zuari/Goa Mitsui/Indonesia 3 n/a 10 November Gas Oriental
Zuari/Goa Muntajat/ex-S. Arabia 3.5 l-t contract 23 November Al Marona
Zuari/Mangalore Mitsui/Indonesia 2.25 n/a 9 November Gas Oriental
East Coast: 135.85
SPIC/Tuticorin Muntajat/Qatar 3 l-t contract 8 November Al Majedah
SPIC/Tuticorin Muntajat/ex-S. Arabia 5 l-t contract End November Al Marona
CIL/ Kakinada CIFC/ex-Iran 4.5 475 4 November Gas Cat
CIL/Vizag CIFC/ex-Iran 4.5 475 2 November Gas Cat
CIL/Kakinada and/or
CIFC/ex-Iran 6.5 n/a 10 November Gas Line
Vizag
CIL/tbc Muntajat/Qatar 6.35 480 10 November Al Majedah
Marubeni/ex-
Iffco/Paradeep 5.5 formula 17-18 November Gaschem Stade
Bangladesh
Iffco/Paradeep Nitrochem/Russia 40 l-t contract 30 November George N
PPL/Paradeep CIFC/ex-Iran 9.5 475 12 November Gas Line
PPL/Paradeep CIFC/ex-Iran 8.5 478 28-29 November Gas Master
PPL/Paradeep Muntajat/ex-S. Arabia 23 l-t contract 29-30 November Camberley
TCL/Haldia Muntajat/ex-Saudi 9 n/a 6-7 November Al Marona
TCL/Haldia Muntajat/Qatar 4.5 n/a 12 November Al Majedah
TCL/Haldia Muntajat/ex-S. Arabia 6 l-t contract End November Al Marona
DECEMBER 15
West and/or East Coast: 15
n/a Muntajat/ex-S. Arabia 15 l-t contracts Early December Al Majedah

PHILIPPINES: The massive typhoon, which smashed its way through the Philippines a couple of weeks ago, has caused
structural damage to the Philippines Phosphate Fertilizer Corporation (Philphos) plant. After conducting a thorough
technical and structural evaluation of its production facilities, Philphos announced earlier this week that it will be in partial
shutdown for a minimum of 45 days. However, there are now reports that the plant is, in fact, in total shutdown with
power supply, communication and utilities in Isabel also down and, indeed, it may take as long as 90 days before it will
resume normal operations.

SOUTH KOREA: October ammonia imports were 78,100 t, with 49,700 t arriving from Saudi Arabia, 15,000 t from
Kuwait and 10,600 t from Australia. (Source: South Korea Customs Data – GTIS)

Buyer/Location Supplier ’000 t Discharge Vessel


NOVEMBER 75+
SFC/Ulsan Yara/Australia 25 8-10 November Viking River
SFC/Ulsan Yara/Australia 25 Late November Viking River
Total SFC 50
Namhae/Yosu Yara/Australia 25 14-17 November Pazifik
Total Namhae 25
Incheon Sabic/S. Arabia n/a 24 November Rose Gas
DECEMBER 81.5

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SFC/Ulsan Mitsui/ex-Black Sea 23.5 3 December Gas Columbia


Total SFC 23.5
Namhae/Yosu Yara/Australia 25 5-6 December Tbn
Namhae/Yosu MSK/Malaysia 10 Mid December Tbn
Sanko
Namhae/Yosu Sabic/S.Arabia 23 End December
Independence
Total Namhae 58

TAIWAN: September imports of ammonia of 24,900 t included 13,800 t from Ukraine and 11,000 t from Trinidad.
(Source: Taiwan Customs Data – GTIS)

VIETNAM: The Dinh Vu DAP plant will tender tomorrow, 22 November, for 7,000 t of ammonia to arrive in Haiphong in
mid-December.

NORTH AMERICA

UNITED STATES: Yara has today settled with Mosaic the ammonia contract price for December deliveries at $450 cfr
Tampa, a $30 drop from the November price of $480 cfr.

In the domestic market, demand for ammonia was light to moderate in centre and east of North Dakota and central and
south Minnesota. In south Wisconsin and north Illinois demand was strong for ammonia going to corn plowdown.

Wholesalers in central Illinois said demand for ammonia going to corn plowdown was moderate and about 50% complete
for Fall. Ammonia demand was heavy in west Illinois and east Iowa for corn plowdown. A few loads of ammonia were still
moving to corn plowdown in north-west Iowa and east and central Nebraska.

Light volume ammonia went to corn plowdown in central and east Kansas and north-west Missouri. Demand was light for
ammonia going to corn plowdown in east Missouri and south-central and south-western Illinois.

Ammonia moved in heavy volume to corn, milo and wheat preplant in north-central and central Texas.

COMPANY NEWS

RUSSIA: PhosAgro earned a net profit for the first nine months of the year of RUB 9.1 billion ($288 million), compared
to RUB 19.1 billion ($615 million) in 9M 2012. Basic and diluted earnings per share came to RUB 64 ($2) for the nine
months 2013 compared to RUB 128 ($4) in 2012.

Nitrogen segment revenue was RUB 9,802 million ($310 million) in January to September 2013, an increase of RUB 231
million y-o-y from RUB 9,571 million ($308 million) on the same period 2012. Production and sales volumes of nitrogen
fertilizers increased by 17% and 18% y-o-y, respectively.

Urea sales volumes increased by 28% following the launch of the new urea plant at PhosAgro-Cherepovets in the
second half of 2012. Export revenue from urea increased by 18% to RUB 6,681 million ($ 211 million) as a result of
higher export sales volumes (up 27%) and a 7% decrease in export revenue per tonne. Ammonium nitrate sales
volumes have decreased by 21%, which was the major factor behind the 17% decrease in revenue from AN sales from
RUB 2,374 million ($75 million) in 9M 2012 to RUB 1,941 million ($61 million) in 9M 2013, which was partially
compensated by a 17% increase in domestic prices.

9M 2013 9M 2012 year-on-year


Product
RUB mln RUB mln change, %
Domestic:
Ammonium nitrate 9,852 8,399 17.3%
Urea 12,959 12,458 4%
Export:
Ammonium nitrate 9,591 10,395 (7.7%)
Urea 10,868 11,701 (7.1%)

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As a result of higher expenses for purchased ammonia, nitrogen segment gross profit decreased by 44% year-on-year to
RUB 3,750 million $119 million) in 9M 2013, with a gross profit margin of 34%, compared to 54% in 9M 2012.

PhosAgro’s cost of sales increased by 18% year-on-year in 9M 2013 to RUB 52,713 million ($1,667 million), in line with
the growth in fertilizer sales volumes of 10%, PPI inflation of 3.7% year-on-year from 9M 2012 to 9M 2013, and a 4%
increase resulting from the consolidation of Metachem. This increase in cost of sales was primarily due to the following
changes from 9M 2012 to 9M 2013:

• A RUB 2,229 million ($71 million) or 17% increase in the cost of materials and services. The consolidation of
Metachem into PhosAgro led to an increase in materials and services expenses of 7%, or RUB 897 million ($28
million). The growth in fertilizer sales volumes by 10% led to higher consumption of related materials and
services.

• Higher production of NPS/NPK, which have a high nitrogen content, led to an increase in purchases of
ammonium sulphate of RUB 510 million ($16 million).

• A RUB 1,709 million ($54 million) or 86% increase in ammonia expenses, mainly due to maintenance and
debottlenecking of ammonia production facilities in August-September 2013 (which has increased annual
production capacity by 50,000 t), which in turn led to higher purchases of ammonia from third parties. Higher
production volumes of nitrogen-based fertilizers and changes in the product mix also meant that PhosAgro’s
third party ammonia purchases increased to RUB 3,687 million ($117 million) in the nine months ended 30
September 2013 from RUB 1,978 million ($64 million) in the nine months ended 30 September 2012.

• An increase in expenditure on natural gas of RUB 293 million ($9 million), or 7%, to RUB 4,353 million ($138
million) in the nine months ended 30 September 2013. Natural gas is required primarily for the production of
ammonia. The price per cubic meter of natural gas rose by 12%, while natural gas consumption decreased by
5% y-o-y. The price increase was due to an approximately 15% tariff increase in 2- half 2012. The decrease in
volume was due to the maintenance of ammonia production facilities during August-September of 2013.

• The increase in cost of sales was partially offset by a year-on-year decrease in expenditure on potash of 8%, or
RUB 297 million (USD 9 million), to RUB 3,416 million (USD 108 million) in the nine months ended 30
September 2013. This was mainly due to a 9% decrease in potash purchase volumes. Although production
volumes of NPK increased by 2%, the share of NPK brands with low potash content in the overall production
mix increased.

RUSSIA/UNITED KINGDOM: UK newspaper, the Evening Standard, reports that Russian fertilizer giant EuroChem is
planning to float on the London stock market within five years following the opening of two huge potash mines that will
dramatically boost the size of the business.

Chief financial officer Andrey Ilyin told the Evening Standard in an exclusive interview that EuroChem — 92%-owned by
businessman Andrey Melnichenko — plans to issue about 25% of its shares in London in 2017 or 2018.

NATURAL GAS

QUICK GLANCE (change from last week)


Henry Hub: $3.63 (down) TTF: €27.81 (up) Brent: $108 (up)

WEST EUROPE: In the UK, day-ahead natural gas prices on the NBP closed at 69.10 p/therm on 20 November, roughly
level with last week’s 69.71 p/therm. This week’s price equates to $11.15/mmBtu at yesterday’s £/$ exchange rate of
1:1.61295. The NBP closed at 68.85 p/therm on 30 October.

The December contract on the ICE natural gas futures for the NBP closed at 70.52 p/therm on 20 November, down from
71.150 p/therm on 13 November. The average 6-month forward strip (Dec 13-May 14) is 69.217 p/therm, on a par with
last week.

In Norway, a labour dispute could impact crude oil and gas output. Onshore and offshore workers of contractors Kaefer,
Bilfinger and Beerenberg are reportedly involved. About 1,400 workers are working fewer hours in the dispute over
salaries.

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The Dutch TTF closed at €27.8081/MWh on 20 November, up from €26.7534/MWh on 13 November. A price of
€27.8081//MWh equates to $11.01/mmBtu at yesterday’s exchange rate of €/$ 1:1.3514.

The TTF day-ahead price is averaging €26.46183/MWh so far in November. The TTF day-ahead price averaged
€25.79/MWh during October (equating to $10.31/mmBtu using the October average exchange rate). This was a decline
on the average of €26.39/MWh ($10.32/mmBtu) during September.

The average six-month forward price for December 2013-May 2014 is €27.46, up from €27.29, and equating to
$10.88/mmBtu using yesterdays $/€ ex-rate of 1:1.3514.

Brent is stable from last week. The final settlement for the CME December 2013 contract was $108.55/bbl on Friday 15
November. The January 2014 closed at $108.06/bbl on 20 November. The average price for the 3-month strip (Jan-Mar
2014) is $107.58/bbl, and the 12-month average (Jan 2014-Jan 2015) is $105.62/bbl. In its latest Short-Term Energy
Outlook, the EIA expects the Brent crude oil price to average $103/bbl in 2014.

Pipeline operators in Slovakia and Ukraine are apparently on the point of signing an agreement that will allow the reverse
flow of natural gas from West Europe to Ukraine. Although Ukraine has already been receiving volumes from West
Europe, via Hungary and Poland, an agreement with Slovakia would enable far larger volumes.

The Slovakian pipeline operator Eustream has not confirmed a deal, which would be politically sensitive since the
Slovakian government has a 20-year agreement with Gazprom, and is a major transit route for east-to-west Russian gas.
In 2012 Slovakia was supplied with 4.3 bcm of natural gas and 36.3 bcm was transited through the country, according to
figures from Gazprom.

The Power Exchange Central Europe (PXE) intends to launch Czech natural gas futures trading on 9 December. The
exchange will offer futures contracts with physical delivery, in partnership with the Central European Gas Hub, which is
based in Vienna. The Central European Gas (CEG) Hub is the gas trading hub at Baumgarten. The Baumgarten hub
receives Russian imports into West Europe. The Czech gas market is not big enough for trading on a single exchange,
which is the reason behind the partnership with CEG. PXE was established in 2007 for power trading for Czech, Slovak
and Hungarian power.

Norwegian state energy company Statoil has moved away from oil-linked contracts and could finish 2013 with around
50% of its northern European contracts priced off gas hubs. Europe's second largest gas supplier, Statoil has reportedly
moved all of its German contracts, and nearly all of its UK, Dutch and Belgian contracts to hub-based pricing. Progress is
slower in Southern and Eastern Europe where gas hubs have less liquidity. Statoil started this year with around 30% of
its contracts hub-based.

Hungary's Minister for National Development Zsuzsanna Nemeth has confirmed the country's commitment to the South
Stream gas pipeline, which will import Russian gas to Europe by-passing Ukraine. Other participating countries are
Bulgaria, Serbia, Slovenia, Italy and Hungary. The Hungarian section of pipeline will be built by a JV owned by Gazprom
and Hungarian Electricity Works. Gazprom has already indicated that the Hungarian section could be completed by
2015.

Poland’s new environment minister Maciej Grabowski intends to make accelerating shale gas exploration a priority. The
out-going environment minister Marcin Korolec will continue to represent Poland at the current UN climate talks. Korolec
had been criticised for slowing progress on shale exploration and introducing regulatory measures that resulted in some
key global players leaving Poland. Exxon Mobil, Marathon Oil and Talisman Energy have pulled out, while those
remaining include Chevron, ConocoPhillips, Eni and San Leon Energy.

UKRAINE: One week away from the European Union’s Eastern Partnership Summit in Lithuania, Ukraine has reportedly
re-started imports of Russian natural gas. Energy and coal minister Eduard Stavytsky claimed this week that a
compromise had been reached on debt repayment. One report suggests that Gazprom had proposed a lower figure for
the debt, although this has not been confirmed. The situation remains fluid heading towards Vilnius, where the summit
begins 28 November.

The average price of Russian gas paid by Naftogaz Ukrainy for September was $429.7/mcm, according to the State
Statistics Service of Ukraine (SSSU). This was an increase of $30.4/mcm compared with August said the SSSU. The
average customs value of gas imported by Ukraine in September 2013, according to the Ministry of Energy Development
and Trade (MED&T), was $407/mcm. Local sources say the MED&T figure is the average of all imports, while the SSSU

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New phone number +44 20 755 19790 21 November 2013

figure is only for Naftogaz Ukrainy. The Service said 4.389 bcm was imported in September, the highest monthly volume.
Around 4 bcm was from Russia, while the balance was from Europe.

RUSSIA: When announcing its Q3 results, Eurochem said for the first nine months of 2013, the average natural gas
prices at Novomoskovskiy Azot and Nevinnomysskiy Azot ammonia facilities were Rub 3,643 and Rub 3,799/mcm
respectively, which the company quoted at $3.59 and $3.74/mmBtu. In the corresponding period in 2012, the average
price was Rub 3,348 and Rub 3,494/mcm respectively, which Eurochem converted to $3.35 and 3.50/mmBtu. The
company said that despite natural gas tariffs increasing 15% from July 2012, the 18% increase in gas output at Severneft
Urengoy, when combined with downward revisions to tariffs in the second quarter, effectively capped the year-on-year
change in gas prices to 2% in rouble terms.

Phosagro has also announced its 9-month results. The producer said spending on natural gas had increased by Rub 293
million ($9 million), or 7%, to Rub 4,353 million ($132 million) in the nine months ended 30 September 2013. Phosagro
said: “The price per cubic metre of natural gas rose by 12%, while natural gas consumption decreased by 5% year-on-
year. The price increase was due to an approximately 15% tariff increase in the second half of 2012. The decrease in
volume was due to the maintenance of ammonia production facilities during August-September of 2013.”

CHINA: Thermal coal prices at Qinhuangdao port for 5500kcal grade have climbed again moving to Rmb 560-570/t ($91-
93/t) from Rmb 550-560/t ($90-91/t), while Tianjin is also Rmb 560-570/t for the same grade, up from Rmb 555-565/t.

AUSTRALIA: The Newcastle market for Q1 2014 was up $0.70 to $85.85/t; Q2 2014 was up $0.45 to $83.70/t and 2014
was up $0.50 to $84.10/t.

UNITED STATES: The Henry Hub closed at $3.6254/mmBtu on 20 November, having climbed to $3.7111 on 18
November as a blast of cold weather blew in over the Great Lakes and the northeast of the country. The Midcont closed
at $3.5388, having settled at $3.4766 on 13 November.

On NYMEX natural gas futures, the average for the next three months –December/January/February – is $3.701, up
from $3.60 last week. The average for the next 12 calendar months (Dec 2013 – Dec 2014) is $3.769, up from $3.68.

EIA expects that the Henry Hub natural gas spot price, which averaged $2.75/mmmBtu in 2012, will average $3.68 in
2013 and $3.84 in 2014.

The EIA Weekly Natural Gas Storage Report for the week ending 8 November showed a net injection of working gas
stocks into underground storage of 20 billion cubic feet (bcf). This was in line with pre-report trade expectations for a
build of 21 bcf. The latest week’s injection compares with the year-ago withdrawal of 12 bcf and the five-year-average
injection of 19 bcf. At 3,834 bcf, natural gas stocks are 80 bcf (2.0%) below a year ago but 58 bcf (1.5%) above the five-
year average.

Moving to oil and the WTI, the CME December contract closed on 20 November at $93.33/bbl, down slightly from
$93.88/bbl last week. The 3-month strip is $93.77, down from $94.37, while the 12-month forward average (Dec 12- Dec
13) is $93.05/bbl, a fraction down on last week’s $93.67/bbl.

US coal – Activity has increased on the CAPP market. The CAPP December contract closed at $53.98/st on 20
November, up from $53.24/st on 13 November. Forward prices for Dec 13-Feb 14 have increased, and now average
$55.06, up from $53.71 last week, while the 12-month average (Dec 2013-Dec 2014) has increased, up to $57.34 from
$56.37/st last week.

AGRICULTURE

CROP FUTURES: Crop prices, with the exception of soybean, have fallen since last week. Corn prices are lower after
a private forecaster increased its global production forecast by 5 million t to 963 million t. However anticipated strong
demand is expected to halt the downward movement in prices. Wheat prices are down on last week due to higher Black
Sea sales but there is now support for prices from forecasts of a lower Argentinian crop than previously anticipated.
Soybean prices were up on strong sales.

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CME CROP PRICES


cents/bushel
Price Weekly Price Price Price
Product
Dec 2013/Jan 14 Change March 2014 Sept 2014 Nov 2012
Corn 417.0 -12.6 425.2 446.2 741.0
Wheat 647.2 -27.8 655.4 662.2 845.2
Soybean 1,273.6 +10.6 1,264.2 1,187.0 1,408.2
Rough Rice 1,568.5 -6.5 1,584.5 1,477.5 1,483.0
Prices are Wednesday’s closing rates for the forward months indicated. The 2012 price in the final column is the
forward price reported one year ago

WORLD: Agriculture has been put on the backburner at the 2013 UN Climate Change Conference currently taking place
in Warsaw, in a move said to have been orchestrated by India and supported by a group of mostly developing nations.
Over 190 countries are gathered at the UN event, where it is hoped a timetable will be agreed in order to reach a legally-
binding global treaty on cutting carbon emissions in 2015. The agriculture chapter is being pushed back, however.

India reportedly spearheaded a motion to block a proposal at the opening plenary of the Subsidiary Body for Scientific
and Technological Advise (SBSTA) for a formal decision on including discussions on agriculture in the talks. They did so
by gaining the backing of the G77 group of developing nations, China and the US, the Hindu newspaper reports.

The move was made in order to hinder efforts to focus on emissions reduction in farming - which is being pursued by a
group of industrialised countries such as the EU, Agra Europe understands. The group would like to see agriculture talks
remain focused on adapting agricultural practices to climate change rather than emission reduction measures, which
they feel would hurt farmers in developing countries more than it would those in places such as the EU.

Discussion on the impact of agriculture on global climate change within the UN's special committee on climate change
will instead take place in the middle of 2014, Agra Europe understands.

The World Farmers Organisation (WFO) has expressed frustration with the development, calling on negotiators to "find a
way forward" and to do "what is right" for farmers and the agriculture sector. "For five years, the world's farmers have
spoken with a single voice asking for this, yet the negotiators continue to fail to listen, and agriculture remains completely
neglected, despite how interconnected it is to climate change," WFO President Robert Carlson said in a statement.

The group stated that the ability of a few countries to halt negotiations on "such an important issue" makes the process
seem "flawed" and "leaves us wishing for a more effective and transparent negotiation space, where farmers' voices can
also be heard."

Greenhouse gas (GHG) emissions from agriculture rose by 1.6% each year between 2000 and 2010, according to the
UN's Food and Agriculture Organisation (FAO). Agriculture produced 5 billion tonnes of carbon dioxide equivalent
emissions in 2010 or 10% of total human-related emissions, outlined the FAO in June. (Source: www.agra-net.com)

Today the UN Environment Programme released a report “Drawing Down N2O to Protect Climate and the Ozone
Layer”. The report says that emissions of nitrous oxide (N2O), could nearly double by 2050 and thus potentially
undermine gains in the ozone layer recovery and exacerbate climate change. http://bit.ly/1awSgvj

The report says that emissions can be reduced by boosting the overall nitrogen use efficiency of agriculture. This means
improving the ability of crops and livestock to better utilize nitrogen, and minimizing the loss of nitrogen to the
environment that occurs during crop cultivation and animal production.

Other options for reducing agricultural emissions of N2O include reducing excessive meat consumption - as the
production of animal protein leads to higher N2O emissions than plant protein - and reducing food waste and loss. As a
considerable percentage of food produced is either lost or wasted, avoiding such wastage could reduce the amount of
food that needs to be produced and, therefore, the emissions associated with its production. UNEP, through its joint
campaign with the FAO, “Think.Eat.Save: Reduce Your Foodprint”, is working to reduce food waste.

The report also suggests that significant gains can be achieved by controlling emissions from just two chemical industries
- adipic acid and nitric acid - which account for about 5% of global N2O emissions. Many nitric acid plants have already
been equipped with N2O reduction equipment.

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EUROPEAN UNION: The European Parliament has approved the EU's spending plans for 2014-2020, including for the
CAP, which will suffer a budget cut of 13% compared to the 2007-2013 period. A large majority of MEPs gave the
necessary 'consent' to a set of agreements on the EU's next 'multiannual financial framework' (MFF) in the Strasbourg
plenary, after months of tense negotiations with member states.

The Parliament will also vote on the CAP reform legislative package for 2014-2020 in Strasbourg on Wednesday
(November 20), with its approval to be followed by that of the Council in the coming weeks.

The Council and Parliament had reached a compromise on the EU's new MFF in June, with MEPs gaining a set of
concessions - though the CAP budget remained unchanged from the amounts agreed by EU leaders back in February.

The overall EU budget, expressed in 2011 'constant' prices, totals €960 billion in 'commitments': legally binding promises
to spend money, which will not necessarily be paid out in the same year but may be disbursed over several years.
Overall 'payments' - actual amounts for each year, which must be covered entirely by total annual revenue - total
€908.4bn. The commitments equate to 1% of the EU's GNI, payments to 0.95%.

CAP budget commitments for 2014-2020 will total €362.79 billion in 2011 prices, as agreed by governments earlier this
year. Pillar One (P1) funds for direct payments and market measures will total €277.85bn, which includes a new 'Crisis
Reserve' for intervention tools. Pillar Two (P2) for co-funding rural development programmes will meanwhile total
€84.94bn, which includes 'extra' allocations negotiated by 16 countries. A 'performance reserve' will see 6% of each
country's P2 envelope made conditional on progress towards a set of pre-agreed targets.

The total CAP budget is some €15.73bn (4.2%) less than was initially proposed by the European Commission and
€54.47bn (13.0%) less than was allocated in 2007-2013. 2014-2020 will see CAP spending reduced for the first time in
its history.

Farm policy will remain the largest share of the MFF, taking up 38% (P1 29%; P2 9%), ahead of Cohesion Policy with
34%. (Source: www.agra-net.com)

UNITED STATES: Corn and soybean harvests are nearing completion in the US, with big-crop states reporting good
progress despite violent storms that swept through the Midwest, the USDA said in its weekly crop report. The US corn
and soybean harvest is expected to wrap up this week, with the corn harvest was 91% complete, while 95% of the
soybean crop was out of fields as of Sunday. Corn harvest progress was ahead of the five-year pace while soybeans
nearly matched it.

Meanwhile, winter wheat conditions fell slightly since last Sunday but were still far above a year ago. Winter wheat was
rated 635 good to excellent, down 2 percentage points from the prior week - but far above the autumn of 2012 when just
34% of the young wheat crop was rated good to excellent due to drought.

Of the big wheat states, Texas deteriorated the most in the past week. Wheat there fell 6 percentage points, with 37%
rated good to excellent "as most areas of the state received little to no precipitation during the week," the Texas weekly
crop report said.

The crop in the top wheat state of Kansas improved by 1 point, with 65% of that wheat good to excellent.

"One thing that does stand out is the emergence of the wheat in southeast Kansas is way behind, still 69% emerged,"
said Aaron Harries of the Kansas Wheat Commission. "That's because it's been so wet there. That's significant since
they had over 500 000 acres of wheat last year." (Source: www.agra-net.com)

ANALYST: Marta Jamrozy EDITOR: Vivien Bright TEL: +44 (0) 207 551 9790 EMAIL: info@fertecon.com

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