Record gas prices prompt fertiliser giants to halt or reduce ammonia production

CF Fertilisers will instead import ammonia to produce AN fertiliser and nitric acid at the site. It expects to fulfil all ammonia and nitric acid contracts and all orders of AN contracted for delivery in the coming months.

The company said that at current natural gas and carbon prices, its 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.

The company has notified customers who purchase carbon dioxide (CO₂) on a contract basis from the Billingham complex about the impending temporary halt of ammonia production. Once the ammonia plant is safely shut down, CO₂ production, which is a by-product of the ammonia production process, will stop until the plant is restarted.

CF Fertilisers has not yet determined the exact date it will begin the temporary shutdown of the ammonia plant. It does not anticipate any impact on employees regarding this announcement, given the substantial level of activity that will continue to occur at Billingham.

Meanwhile Yara has announced further curtailments, which will take its total European ammonia capacity utilisation to around 35%.

With this, Yara will have curtailed an annual capacity equivalent of 3.1 million tonnes ammonia and 4.0 million tonnes finished products (1.8 million tonnes urea, 1.9 million tonnes nitrates and 0.3 million tonnes NPK) across its production system in Europe.

In a statement, Yara said it will, where possible, use its global sourcing and production system to optimise operations and meet customer demand, including continued nitrate production using imported ammonia when feasible. Yara will also continue to monitor the situation and adapt to market conditions going forward.