FACT, Coromandel, other fertiliser shares gain up to 14% ahead of likely opening of Strait of Hormuz on Friday

About this update from Rashtriya Chemicals & Fertilizers Ltd.

Fertiliser shares gained up to 14 percent on Tuesday amid expectations that the Strait of Hormuz could reopen on Friday, easing concerns over supplies of key raw materials used by the sector.US President Donald Trump said on Monday that a preliminary agreement to end the war in the Gulf has been signed by the US and Iran.The agreement would extend a ceasefire announced in April by another 60 days and reopen the Strait of Hormuz, which Iran has effectively blocked since the US and Israel attacked Iran in February.India's exposure to the Strait of Hormuz goes beyond crude oil, with sectors such as petrochemicals, polymers, construction inputs, fertilisers and bullion likely to benefit from easing supply risks.Shares of The Fertilisers and Chemicals Travancore were among the top gainers, rising as much as 14 percent to Rs 1,029 per share on the NSE. Chambal Fertilisers and Chemicals gained 5 percent, while Rashtriya Chemicals and Fertilizers advanced 4 percent. Shares of Gujarat State Fertilizers & Chemicals rose 3 percent.Fertiliser firms stand to benefit from easing supply concerns as India's import dependence on Hormuz-linked economies is high for anhydrous ammonia and sulphur, at 78.8 percent and 95.9 percent, respectively. Both are key inputs used in fertiliser production.Any disruption in ammonia or sulphur supplies could raise production costs and affect fertiliser availability ahead of key sowing seasons.India is one of the world's largest consumers of urea and any prolonged disruption in production could affect fertiliser availability ahead of the crucial kharif sowing season.According to the fertilisers ministry, 16 India-bound ships carrying fertilisers are currently stranded in the Strait of Hormuz.Joint Secretary in the fertilisers ministry Bandana Preyashi said eight ships carrying 330,000 metric tonnes of urea, four ships loaded with 257,000 tonnes of di-ammonium phosphate, one vessel carrying ammonia and three ships carrying 110,000 tonnes of sulphur are in the Strait of Hormuz.To meet domestic demand for the summer crop season, India has already imported 5 million tonnes of crop nutrients, including urea, apart from boosting local output, she said.India has also floated a global tender to import 1.7 million tonnes of urea."At present, we see no major challenge to the availability of fertilisers in the current sowing season," Preyashi said, a...

View stock analysis, news, and events for Rashtriya Chemicals & Fertilizers Ltd.