EuroChem Group AG, Zug, Switzerland, was one of the latest fertilizer producers in Europe this week to have made production curtailments amid record high natural gas prices in the region. It temporarily reduced fertilizer output at two of its plants in Belgium and Lithuania, according to Bloomberg on March 15, citing a statement from the company.
EuroChem said “it is working with the relevant authorities and partners in order to fully resume operations at these facilities,” but provided few other details.
BASF late last week was reported to be suspending ammonium sulfate deliveries to EuroChem’s Antwerp plant due to EuroChem’s owner coming under European Union sanctions, according to World News Report. However, this could not be confirmed with either party by Green Markets atpress time
Production curtailment announcements have also come over the past week from Lithuania’s nitrogen fertilizer and chemicals producer AB Achema, Croatian fertilizer producer Petrokemija d.d, and Polish producer Grupa Azoty.
Achema Extends Ammonia One Shutdown
Lithuania’s nitrogen fertilizer and chemicals producer Achema is reported to have decided to extend the shutdown of its ammonia 1 plant until at least August due to high natural gas prices. Production at the ammonia 1 plant, one of two ammonia plants operated by the company, remained shut after annual repairs were completed last July (GM Feb. 11, p. 34). In October, Achema cut production due to high natural gas prices.
Petrokemija Halts Production Again
Croatian producer Petrokemija d.d said on March 11 it has taken down temporarily its ammonia and urea production facilities for planned maintenance and to cut costs amid rising natural gas prices.
The producer said the price of gas reached €251 per megawatt hour (MWh) on March 7 from €118/MWh on March 1, “with strong volatility, which required a fast reaction to prevent uncontrolled losses at a time of lower market demand for fertilizers due to surging prices,” according to a SeeNews report, citing a company statement.
Petrokemija said it had postponed the planned maintenance work due to a lack of spare parts, due to the longer periods needed for them to be provided from Asia.
The company had only restarted production at its ammonia and urea plants on Jan. 21, after temporarily halting production on Dec. 3 due to a technical failure (GM Jan. 21, p. 28; Dec. 3, 2021).
It said it is maintaining normal production of other fertilizers, and before it halted ammonia and urea production on March 11, was able to produce sufficient volumes to meet the current demand of local farmers, according to the report.
Major Polish Fertilizer Plant Offline
The subsidiary of Polish fertilizer and chemicals company Grupa Azoty SA, Grupa Azoty Zakłady Chemiczne Police SA, on March 9 reported technical issues at the power plant at its Police production site involving the failure of two OP 230 boilers.
Zakłady Chemiczne Police said as a consequence, it had become impossible to generate the process steam necessary for the production of the Police’s most important units, resulting in “a temporary stoppage or a very significant limitation of production,” and as a result, has declared a force majeure event.
Police is Poland’s largest manufacturer of compound fertilizers, with some 1 million mt/y of production capacity. It also produces urea, among other products.
Zakłady Chemiczne Police in its March 9 statement said based on current available information, the company is unable to specify “a firm deadline” for resolving the technical problems and bringing production back up to its previous levels.
However, Grupa Azoty SA said it expects no shortages of fertilizer supply on the domestic market despite the “very demanding” situation on commodity markets and the breakdown of the power plant at the Police production site, according to a Polish Press Agency (PAP) report, citing a company statement.
Production of fertilizers continues despite “very demanding” conditions on the commodity markets, especially the “drastic” growth of gas prices, Azoty said.
Back in the late summer/autumn of last year, while Azoty decided not to limit the production of fertilizers, it did decide to limit its fertilizer exports with the exception of long-term contracts, and make supplying the domestic market a priority (GM Oct. 29, 2021; Oct. 15, 2021).
New Outages Follow Yara, Borealis, Nitrogénművek Zrt
All of these outages follow Yara International ASA’s announcement on March 9 that it was temporarily curtailing production at its Ferrara, Italy, and Le Havre, France plants (which produce both ammonia and urea) as a consequence of record-high natural gas prices in Europe (GM March 11 p. 1).
The company said including optimization and maintenance at other production facilities, it expected to be operating at approximately 45 percent of capacity by the end of last week.
Vienna-based Borealis AG, another European producer, also said on March 9 that it was running its ammonia production at a reduced rate due to high natural gas prices in Europe, and was considering halting output “for economic reasons.” Hungarian producer Nitrogénművek Zrt also said last week it was temporarily halting output of ammonia, citing high natural gas prices.