UPDATE 1-Yara to restart Italian urea/ammonia plant

(Adds quotes, shares, details)

OSLO, Jan 22 (Reuters) - Norway's Yara International ASA YAR.OL, one of the world's biggest fertiliser producers, said it would next month restart an urea and ammonia plant in Italy due to improving market conditions, boosting its shares.

The plant, with an annual production capacity of 600,000 tonnes of ammonia and 550,000 tonnes of urea, has been shut since late October 2008 as Yara cut production due to weak markets.

“The decision to restart production is related to the general improvements in the international urea markets and the specific situation in Italy with increased seasonal demand,” Yara said in a statement.

Shares in Yara rose 5.1 percent to 166.50 crowns at 0844 GMT, outpacing a 2.6 percent rise on Oslo's .OSEBX index.

The facility in Ferrara, Italy, transforms natural gas into ammonia and urea, which are the main components in the production of nitrogen fertilizers and chemicals.

Yara said it was continuously evaluating production levels. The company also temporarily shut fertiliser plants in France and the Netherlands late last year.

“We will not rule out restarting other plants,” Yara spokesman Torgeir Kvidal said. “This is a continuing assessment based on volume development and prices.”

Kvidal said urea prices have increased to around $300 per tonne from lows around $205, while ammonia prices have been volatile due to a production stop in Ukraine.

He said that Russian ammonia was now priced around $200 per tonne while in the United States prices were as low as $125. (Reporting by Wojciech Moskwa and Joachim Dagenborg; Editing by Hans Peters)