AGF Nitrogen weighs ammonia plant shutdowns as gas costs soar and demand weakens

AGF Nitrogen, which Reuters describes as Europe’s second-biggest ammonia and fertilizer maker, has halted some ammonia production lines, and more could follow within weeks. Chief executive Petr Cingr told Reuters in a November 4 report from Prague that the company is weighing shutdowns at its ammonia plants.

The driver is gas. Cingr said high gas prices, driven by geopolitical tensions in Ukraine and the Middle East, have made European ammonia production more expensive than imports. Global Banking & Finance Review, which republished the Reuters report, cited an S&P Global analysis that European ammonia production costs have exceeded import costs as gas prices surged.

Weak demand adds to the pressure. The report said Cingr also pointed to a slump in demand, alongside the gas cost problem.

The report did not say how many lines have been halted or which plants could be affected. Shutdowns beyond the lines already halted would reduce European ammonia output, but the report did not quantify that effect.

Sources: Reuters via Global Banking & Finance Review