Azomureş Targu Mureș, Romania’s biggest fertilizer producer, said it stopped fertilizer production on Dec. 17, and in the next few days the production facilities and equipment will be completely shut down.
The company had announced on Dec. 6 it was starting preparations for the temporary production shutdown due to the “very high prices” for energy, natural gas, and electricity (GM Dec. 10, p. 28).
In its Dec. 17 statement, the company said the price of natural gas in Romania has continued to “significantly increase,” with the price for gas delivered in January at €132 per MWh (approximately $149.3 per MWh at current exchange rates) on Dec. 15, up from €90 per MWh on Dec. 6.
Azomureş pointed out that at the European level the price of gas has continued to increase, but the increase in Romania was “even more pronounced,” and the gap for Romanian buyers is getting worse. It said in the first half of 2021, the gas quotation on the Romanian Commodities Exchange (BRM) was a discount of €3 to the European benchmarks, but in the last months in Romania, the final price was a €9 premium above European benchmarks.
The company also noted carbon certificates have increased to a level beyond €80/mt CO2 after starting the year at around €30/mt.
Azomureş said for the company, the resulting fertilizer prices will not be affordable to distributors and farmers.
“The combination of effects in the Romanian market means that the price of Romanian fertilizers would be among the highest in Europe, if the local costs of the main raw material, natural gas, were completely transferred to the final product,” said Azomureş CEO Harri Kiiski.
“It is impossible for Romanian farmers to accept such premiums, and therefore it is impossible for Azomureş to operate at such costs,” he said.
The company has activated the technical plan for the protection of its production installations and equipment for the cold period (winterization), and its employees continue to come to work.
“We are ready at any time to restart production if and when market conditions allow it,” said Azomureş.
The company put its annual production under normal operating conditions at 1.6 million mt of fertilizers, with approximately 75 percent of the production being destined for Romanian farmers.