The Brazilian Comexport is not having a particularly good time with Polish companies. It is suing Ciech for its failure to supply sulphur and now it cannot find an agreement with chemical works Zakłady Azotowe Tarnów on the price of ammonium sulphate ((NH4) 2SO4).
The Polish firm has proposed USD50 per ton whereas the world price is nearer USD40 per ton. Comexport is one of the largest users of this product and take around 150,000 tons per year of this product which represents over forty percent of total production. The remainder is sold to companies in Germany and France. If no deal is reached and the client is lost then it could cost Tarnów at least USD6m. If the contract is not fulfilled then the penalty could be even higher. In the case that Comexport goes elsewhere then Tarnów will have serious problems in finding a buyer for 1.1m tons of ammonium sulphate.
A current glut on the market means that Tarnów will have to start limiting the supply of caprolactam of which ammonium sulphate is a bi product. Production of caprolactum may be reduced by as much as 15 percent but this in turn could lead to costs of USD20m.
This is not good for the chemical works. It is now known off the record that the company is losing money and it could be as much as PLN65m in the red by the end of the year.
Comexport also buys around 100,000 tons of ammonium sulphate from the Puławy chemical works and could place further orders here if no deal is made with Tarnów.