Azomures Targu Mures, the largest producer of fertilizers used in agriculture in Romania, announces that it is temporarily halting production of fertilizers, with the company saying it will resume production “if and when market conditions allow”.
The company claims that since 6 December, when Azomures made the initial announcement of preparation to stop production, the price of natural gas in Romania has continued to rise significantly.
By comparison, on 6 December, the price of gas delivered in January 2022 was 90 euros/MWh, on 15 December, the price for gas delivered in January was 132 euros/MWh. It is worth noting that at the European level the price of gas has continued to rise, but in Romania, the increase has been even more pronounced, and the gap for industrial users in Romania is widening.
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If in the first half of 2021, the quotation on the Romanian Commodity Exchange (BRM) meant a reduction of 3 euros compared to the European Reference Price (ERP), in the last month in Romania the final price was 9 euros above the ERP reference price.
Meanwhile, the price of carbon certificates has risen to over €80/tonne CO2, after starting the year at around €30.
In this situation, Azomures says it cannot produce fertilizer at prices affordable to distributors and farmers.
“The combination of these effects on the Romanian market means that the price of Romanian fertilizers would be among the highest in Europe if the local costs of the main raw material, natural gas, were fully passed on to the final product. It is impossible for Romanian farmers to accept such prices and therefore it is impossible for Azomures to operate with such costs,” said Harri Kiiski, CEO of Azomures.
Technically, the production facilities on the Azomures platform will be completely shut down in the coming days until Monday 20 December.
“The technical plan for the protection of facilities and equipment for the cold period (winterization) is activated, employees will come to work and are ready at any time to resume production if and when market conditions allow. This shutdown is not an overhaul, our only activities will be local maintenance and preparation of facilities for winter, but we will try to manage the platform as best we can until the market situation in Romania improves,” added Harri Kiiski.
Azomures claims that the spring agricultural campaign (March – April 2022) may be severely affected by the lack of fertilizer supply, with the consequences becoming more visible in the summer of 2022.