ICL Group Ltd. said its business activities continue to function following the deadly attack on Israel from Hamas, and that it remains committed to its customers from a business perspective “while acknowledging the toll of the circumstances on all involved,” as cited by a Dow Jones report.
ICL has production assets in southern areas of the country that have been affected by the recent events, but on Oct. 9 said there was no impact on its production or exports.
The Port of Ashdod, just 20 miles north of the Gaza Strip and a key hub for ICL’s potash exports, is in emergency mode as a result of the escalating conflict. This is putting as much as 3% of global potash supply at risk, according to Scotiabank analyst Ben Isaacson, as cited by a Bloomberg report.
ICL in August said it was targeting the production of 4.7 million mt of potash this year and was expecting its third- and fourth-quarter potash sales volumes to be “relatively similar” to the second quarter, when it sold 1.26 million mt (GM Aug. 11, p. 27).
Some freight insurers on Oct. 9 suspended coverage in Israel and Palestine on the transport of freight and on third-party civil liability policies following Israel’s declaration of war on Hamas, according to a notice from Grupo Raminatrans, an international logistics company.
Several fertilizer stocks saw significant jumps earlier in the week as Wall Street weighed the prospect of potash supply problems stemming from the Middle East crisis. Nutrien Ltd., the world’s biggest potash producer, rose as much as 4.2%, the most since July, according to Bloomberg.
CF Industries Holdings Inc., the leading nitrogen producer, gained as much as 6.2%, the most in a month. Mosaic Co. climbed as much as 6.7%, the stock’s biggest intraday gain in almost a year.
The potential involvement of Iran, a key Middle East exporter of nitrogen, could lead to a spike in nitrogen fertilizer prices due to limited supply and potential premiums in benchmark Dutch TTF natural gas, Isaacson warned.
TTF natural gas futures reached their highest level since mid-June after Israel on Oct. 8 ordered the shutdown of the Tamar gas field in the Mediterranean Sea, citing safety concerns amid the escalating conflict. Halting the Tamar field resulted in a roughly 20% reduction of Israel’s gas shipments to Egypt, according to Bloomberg.
So far, the larger Leviathan gas field, which also supplies gas to Egypt, is continuing to operate. Should Leviathan keep operating at normal rates and output is ramped up at the Karish field, Israeli gas should continue to flow to Egypt, Bloomberg reported, citing Energy Aspects Ltd. analyst Leo Kabouche.
Kabouche said the key unknown is the duration of the outage, adding that Israeli gas is critical to feedgas availability in Egypt given the slide in domestic production there.
There already are concerns that the halt in supplies from Tamar will further impact Egypt’s ability to export LNG. Egypt’s oil minister said last week that the country will resume exports of LNG this month following a break over the summer. But the stoppage at Tamar could result in lower shipments to buyers in Europe, who are increasingly reliant on alternatives to Russian natural gas.
Iran’s possible involvement in the conflict could also endanger movement of vessels though the Strait of Hormuz, through which one third of traded liquefied natural gas passes, Kabouche said.