CF Industries Holdings Inc.’s Billingham plant in Teeside, Northeast England, is currently profitable and should stay open for the coming months, CF President and CEO Tony Will told Bloomberg in an interview.
“Our expectation is that we can run the plant through the application season this spring, and then by the time we get to June and the summer months when there’s really no fertilizer application going down, there’s a question to the viability,” Will said.
“Then gas costs start becoming a real big question there as well,” he said.
CF secured a new offtake and pricing agreement with the U.K.’s carbon dioxide industry in early February, allowing the Billingham plant to continue to operate while global gas prices remain high (GM Feb. 4, p. 28). The previous agreement between CF and its industrial gas customers expired on Jan. 31 (GM Jan. 28, p. 29).
The company’s two U.K. plants – the other is at Ince, Cheshire, and is currently idled – produce an estimated 60 percent of the U.K.s commercial supply of CO2, which is a byproduct of ammonia production.
Will confirmed to Bloomberg thatits Ince plant remains offline, and said the company probably will not be able to bring it back “anytime soon.”
He said exporting out of the Ince plant is “a challenge” since it is landlocked, and the plant has a limited flexibility in the product mix it can make.
Market dynamics make a restart right now unfeasible since it requires burning millions of dollars of gas for days before a product can be made, the CEO told Bloomberg.
Back in early November 2021, CF had said it could use bought-in ammonia to get the Ince plant back online (GM Nov. 5, 2021).
“It is also not good for plants to be restarted and then closed frequently, so CF needs visibility for several months out to know it will be profitable longer term. Right now, with the tumultuous world we live in, we don’t have that kind of clarity six to nine months out,” Will said.
In addition to ammonia, CF’s two U.K. plants largely produce ammonium nitrate and NPKs.