UK's CF proposes Billingham ammonia closure

Market: Fertilizers
25/07/23

CF Fertilisers UK today confirmed it is proposing to permanently close the ammonia plant at its Billingham complex, located on the east coast of England.

The company said the closure is aimed at securing the long-term sustainability of its business in the UK, and to help serve its customers in the country more efficiently. CF intends to continue ammonium nitrate (AN) and nitric acid production at the Billingham site, by using imported ammonia. The company has been relying on imported ammonia at the facility for the past 10 months following its decision to temporarily idle the plant in August 2022.

CF said it does not expect ammonia production at Billingham to be cost-competitive in the long-term compared with imported ammonia, primarily because natural gas prices are projected to remain high in the UK, relative to other regions, and also because of the impact of carbon costs. Additionally, the company said the closure in recent years of industrial customers' UK operations that had consumed significant ammonia volumes for their businesses, has created a supply-demand imbalance for ammonia production at Billingham. The company believes that ample global availability of ammonia for import, including from CF Industries' North American production network, will enable more cost-competitive and efficient production and sales of ammonium nitrate fertiliser and nitric acid for its UK agriculture and chemicals customers moving forward. Its next ammonia import cargo of 9,000t is scheduled to arrive at Tees port around 7-8 August on Trafigura's Oceanic Breeze ex-CF Donaldsonville, and the producer has been importing similar-sized cargoes from its Americas plants for much of this year.

CF will be entering into the required collective redundancy consultation process with its recognised union, Unite, and elected employee representatives. The company anticipates that some of the 38 proposed redundancies might be avoided by redeployment opportunities.

By Natalie Kakish

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