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Meat sector braces for CO2 shortage as energy prices cut European fertiliser production

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European fertiliser manufacturers have already reduced their output by more than one quarter, according to figures from CRU. And things look set to get worse.

The European fertiliser shortage continued to widen this week, when two large fertiliser producers announced plans to further cut production levels. Oslo-based Yara announced it is implementing further curtailments that will take its total European ammonia capacity utilisation to around 35%. Meanwhile, UK-based CF Fertilisers, announced its intention to temporarily halt ammonia production at its Billingham Complex. The company had already shuttered its Cheshire plant.

Both firms cited the ‘record high’ price of gas, a key production input.

“At current natural gas and carbon prices, CF Fertilisers UK’s ammonia production is uneconomical, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level. The current cost of natural gas at NBP is more than twice as high as it was one year ago, with the NBP forward strip suggesting that this price will continue to rise in the months ahead,”​ CF Fertilisers detailed.

Yara and CF Fertilisers said they are looking to imports to fill the gap.

“Yara will where possible use its global sourcing and production system to optimize operations and meet customer demand, including continued nitrate production using imported ammonia when feasible,”​ the Oslo-based company said.

“CF Fertilisers UK 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. The Company expects to fulfil all ammonia and nitric acid contracts and all orders of AN contracted for delivery in the coming months,”​ the UK subsidiary of CF Industries Holdings revealed in a statement.



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