Yara brings European ammonia production back on stream

Norwegian fertiliser company Yara has brought most of its European ammonia production back on stream after prices of finished fertilisers rose to make up for a surge in the cost of gas.

“Yara will continue to monitor the situation, with the objective to keep supplying customers but curtailing production where necessary,” the company said in a statement on Wednesday.

The global ammonia market size is projected to reach US $110.93 billion by 2028, with an average CAGR of 6.4 per cent. According to Fortune Business Insights, the market’s value is expected to cross US $72 billion in 2021. But fertiliser prices have risen sharply this year tracking higher energy costs, putting key crops at risk and adding to global food security and inflation fears.

“The price of finished nitrogen fertiliser has risen in the quarter to a level where it has been profitable for us to start up production and, in addition, the global ammonia price has also risen,” a Yara spokesperson told Reuters.

The record high natural gas prices led Yara to curtail ammonia production at a number of its plants in Europe in September. Including planned maintenance and unscheduled outages, Yara’s European ammonia production was 30 per cent below capacity from September to November.

“The impact on finished fertiliser production has been limited, as unprofitable ammonia production has been replaced with sourcing from Yara plants outside Europe, and from Yara’s global ammonia trade and shipping network,” the company said in a statement.

Yara has the capacity to produce 8.5 million tonnes of ammonia per year worldwide, with 4.9 million tonnes of that coming from Europe.