Yara has announced today (Thursday, August 25) that it will be implementing further ammonia production cuts as a result of record-high gas prices in Europe.
The fertiliser giant explained that the curtailment will take its total European manufacturing and production capabilities for ammonia to around 35%.
The latest announcement brings Yara total curtailments to an equivalent of 3.1 million tonnes ammonia and 4 million tonnes finished products, such as urea, nitrates and multi-nutrient (NPK) fertilisers, across its production system in Europe.
In a statement, Yara said that it will use its global sourcing and production system to optimise operations and meet customer demand.
This will include the include continued nitrate production using imported ammonia where feasible.
“Yara will continue to monitor the situation and adapt to market conditions going forward,” the company said.
Last September, Yara announced that it was cutting 40% of its European ammonia production due to record natural gas prices on the continent.
Yara has multiple bases on the island of Ireland, with two sites near Belfast in Northern Ireland, and a site in Ringaskiddy, Co. Cork, for bagging and distribution.
Meanwhile, CF Fertilisers UK, a subsidiary of CF Industries Holdings, has announced its intention to temporarily halt ammonia production at its Billingham facility due to “market conditions”.
The company said that it intends to use the site’s capability to import ammonia to enable it to continue to run its ammonium nitrate (AN) and nitric acid upgrade plants.
CF Fertilisers added that it expects to fulfil all ammonia and nitric acid contracts and all orders of AN contracted for delivery in the coming months.
“At current natural gas and carbon prices, CF Fertilisers UK’s ammonia production is uneconomical, with marginal costs above £2,000/t and global ammonia prices at about half that level,” the company outlined.
Elsewhere, Poland’s largest chemical company has decided to temporarily shut down its nitrogen (N) fertiliser production units due to record natural gas prices.
Grupa Azoty SA said that the current situation in the gas market, which determines profitability of its production activities, is “extraordinary and completely beyond the company’s control, and could not have been predicted”.
“Over the past six months, gas prices surged from €72/megawatt hour (MWh) on February 22, 2022 to €276/MWh on August 22, 2022,” a statement from the company outlined.