Polish fertilizer and chemicals producer Zakłady Azotowe Puławy SA has temporarily reduced melamine production due to rising natural gas prices and an assessment of achievable melamine sales prices, parent company Grupa Azoty SA said in a statement late last week.
According to a Bloomberg report, citing a regulatory filing by Puławy, melamine production has been cut to 20% of capacity as current melamine sales prices cannot compensate for the high cost of natural gas needed for production
Puławy said in the filing it would continue to fulfill short-term delivery contracts, partly by running down inventory.
The company is one of the biggest melamine producers globally, with annual production capacity of 96,000 mt. According to the Bloomberg report, the company said it is not currently possible to estimate the impact of the melamine production outage on its earnings.
Meanwhile, a spokesperson for Grupa Azoty told Green Markets this week that the production of ammonia and fertilizers in the group continues at “a normal level.”
Poland’s industrial companies last week were reported to be preparing emergency plans in case of gas rationing in the country (GM July 8, p. 32).
The Polish newspaper Puls Biznesu also reported that Poland’s chemicals industry is in talks with public administration concerning the possibility of outage of some production facilities, for perhaps a month, in exchange for compensation.
Grupa Azoty last week reported it and its subsidiaries had extended natural gas supply deals with Poland’s oil and gas major PGNiG, this time to run through the end of September 2023.