Austrian factory closes. The fertilizer crisis due to natural gas shortage affects Europe

What few people consider is that Natural Gas has little-known but essential industrial uses in the modern world. Among the most important is its role in the production of ammonia and carbon dioxide, the former essential in the manufacture of many substances necessary for agriculture and chemistry, including fertilizers, and the latter used as a preservative in the food industry. as well as for the production of dry ice.

The boom in the price of natural gas led to the interruption of fertilizer production in the United Kingdom, which was then resumed only with government grants. Now Europe is also joining the crisis.

The fertilizer Borealis Age Austrian manufacturer has cut production of ammonia after the cost of the primary raw material, natural gas, compressed margins in an industry that already addresses the problem of scarce supplies of raw materials, .

The effects of the energy crisis on the ammonia price

tica are feeling very much alive. Commodity analysts from the CRU group said half of the continent's ammonia capacity could be at risk due to decreased production due to high methane prices. Spot ammonia prices per tonne in Western Europe increased from around $ 225 per ton at the start of the virus pandemic to $ 700 per tonne this month.

Problems can also be expected for slaughterhouses and carbonated drinks, which use the carbon dioxide produced in these production processes. Meanwhile, the level of natural gas in the Eruopean reserves is at a minimum due to the shortage of supply from Russia.

Winter risks not only being cold, but also with interruptions in the supply of many foods. A bad winter that few European governments are dealing with.

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This is a machine translation of a post published on Scenari Economici at the URL on Sat, 25 Sep 2021 18:55:20 +0000.