Fertilizer factories are cutting capacity in Europe after gas costs rise

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The European fertilizer industry shut down or curtailed production at 10 plants in July as gas costs soar and global urea prices fall, eroding its competitiveness.

as prices have risen since Russia’s invasion of Ukraine in February and Moscow is restricting supplies to Europe in response to Western sanctions. Gas is the main feedstock for nitrogen-rich ammonia fertilizers, while urea is a basic product of these crops.

Fertilizer Europe, which announced the cuts in production on Tuesday, is calling on the European Union to divest itself of Russian gas, energy and raw materials. The industry association did not name the companies that have cut production.

In July, European fertilizer giant Yara International announced it had shut down several sites because of the energy crisis and warned of further cuts. Similarly, Borealis, another European producer, previously said it was considering plant shutdowns for economic reasons.

Fertilizer Europe called on the EU to pay special attention to fertilizer application in the coming season to preserve the region’s agricultural benefits in the face of drought conditions.

An industry source recently told the Farming Independent that there hasn’t been pressure to produce much because there hasn’t been demand for fertilizer in recent weeks and producers have been “sitting on their hands”.

But from the beginning of August, demand is expected to increase and with it the prices.

“In the last month and a half, the main CAN manufacturers have not given prices, but from August 1st they will. We managed without them as demand was so low, but anything ammonia-related will see price increases,” the source said.

“The price of fertilizer will soon become very solid in one direction. If there is no magic geopolitical trick the EU can pull, there is only one outcome and that is that the next six to eight months will see a very high price period.”

https://www.independent.ie/business/farming/news/fertiliser-plants-curb-capacity-in-europe-after-gas-costs-surge-41896641.html Fertilizer factories are cutting capacity in Europe after gas costs rise

Fry Electronics Team

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