Azomureş Targu Mureș, Romania’s biggest fertilizer producer, said on Dec. 6 it was starting preparations for the temporary shutdown of production due to the “very high prices” for energy, natural gas, and electricity.
The company, which is part of the Swiss trading group Ameropa Holding AG, already had reduced production by half in early October due to soaring natural gas prices.
“The high level of the price being asked by suppliers for the main raw material, methane gas, no longer allows us to sustainably continue [production] activity,” said Azomureş General Manager Harri Kiiski in a Dec. 6 statement, adding that the resumption of activity depends on the methane gas price and its availability on the market.
The producer expects January and February to be “the critical periods” it needs to overcome, though with the uncertain natural gas situation, it said it will remain flexible through all of the first quarter.
The decision will not have any immediate effects on employees, and the company said it will maintain a normal work schedule and will focus on maintenance work and on projects currently underway.
Azomureş has production capacity for around 1.8 million mt/y, according to Ameropa’s website.
It produces granular and prilled ammonium nitrate, granular CAN, granular urea and NPKs, and NPs, and provides about 50 percent of the fertilizers used on Romanian farms, according to the company.
Azomureş’ decision to halt fertilizer production may be supportive for Poland’s Grupa Azoty SA, according to Warsaw-based Bank Pekao SA, as cited by a Bloomberg report. However, Pekao analysts highlighted that the move by Azomureş underlines the seriousness of profitability issues stemming from high natural gas prices.
Pekao analyst Krzysztof Kozieł said another producer decision to halt fertilizer output in Europe may be positive in the mid-term for Azoty given supply-chain disruptions.
However, Kozieł, according to the report, warned it may also show that Azoty’s production faces profitability challenges, and that the Polish fertilizers and chemicals group is entering “terra incognita” with the risk that farmers may not accept much higher prices.
Vienna-based Erste Group Bank AG analysts also see the Azomureş’ production halt as supportive for Azoty among other fertilizer producers in the region, according to Bloomberg.