The second largest producer of nitrogen fertilizers in the EU has suspended sales

The second largest producer of nitrogen and complex fertilizers in the European Union, the Polish company Grupa Azoty, has temporarily stopped accepting new March orders for nitrogen fertilizers. This is stated in the company’s statement on LinkedIn.

At the same time, the company denies reports of a production halt. All orders submitted before the publication of the notice on the temporary suspension of accepting new applications are being fulfilled.

The decision was made due to the unstable geopolitical situation in the Middle East. On March 2, the price of gas, the main raw material for the production of nitrogen fertilizers, increased by 35–50%, and an additional increase is about 30%.

As the company noted, such a price increase may be short-term. At the same time, fertilizer producers outside Europe (Egypt, Algeria, China, the USA) have already increased prices by $45–70/t.

“Grupa Azoty decided not to pass on such a sharp increase in costs to its partners. At the same time, accepting new orders on the previous terms and at such costs could lead to negative financial consequences for the company. A temporary pause will allow for more informed decisions. A similar step was taken by producers from other countries in the region, as well as importers of fertilizers from third countries, who withdrew their offers,” the statement said.

The restriction does not apply to complex (NPK) fertilizers, since the share of gas in their cost is much lower than that of nitrogen fertilizers. At the same time, the decision may change depending on the dynamics of prices for other raw materials.

Tags: Ukraine, Poland, fertilizers