[Special Stock] Hyosung O&B, Russia-Ukraine Black Sea Grain Deal Practically Invalid... Fertilizer Raw Material Ammonia Shortage↑

Hyosung O&b is showing strong performance. It is interpreted that this is influenced by news that the global ammonia supply is becoming scarce due to conflicts between Russia and Ukraine over the Black Sea agreement.

As of 2:01 PM on the 25th, Hyosung O&b is trading at 9,080 KRW, up 2.25% compared to the previous day.

According to foreign media, last July, the United Nations and T?rkiye mediated to extend the Black Sea agreement for two months, but Russia expressed dissatisfaction with the extension negotiations and is reportedly continuing airstrikes against Ukraine.

According to foreign media, Ukraine claims that Russia has blocked access to Pivdennyi, a Black Sea grain export port, while Russia accuses Ukraine of preventing its ammonia transport through the Pivdennyi pipeline, with mutual accusations ongoing.

Previously, Russia exported ammonia by sending 2.5 million tons annually through a pipeline from Togliatti to the Pivdennyi port. Russian UN Ambassador Vasily Nebenzya stated that the ammonia exports, which have been halted, are used to produce 7 million tons of fertilizer annually, enough to supply food for 200 million people and still have surplus.

Ambassador Nebenzya said at the UN Security Council, “These shipments should have resumed simultaneously with Ukraine’s grain exports, but we were never allowed to do so,” adding, “Due to the shortage, the global market is experiencing a 70% deficit in ammonia.”

Ammonia is the main component of chemical fertilizers. It serves as a raw material for finished fertilizers such as urea and ammonium nitrate. Therefore, the market interprets that if ammonia prices rise due to shortages, the cost ratio of fertilizers will increase, leading to a chain reaction of price hikes, benefiting fertilizer producers like Hyosung O&b.