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Rising gas prices challenge EU nitrogen production

  • Market: Fertilizers
  • 13/10/23

Natural gas prices in Europe have risen by around 40pc over the past week and, once again, pose a challenge to regional nitrogen production.

Spot prices at the TTF hub are up to an eight-month high of €53/MWh today, crushing margins for both agricultural urea and nitrates producers.

Argus estimates that even the most efficient granular urea plants face production costs around €425/t ex-works at a gas cost of €53/MWh, while older units would cost closer to €470/t. One week ago these costs were €100/t less — and production margins were positive. Spot market prices for granular urea in Europe have generally held at around €420-425/t fca seaports in bulk across most northern, Mediterranean and east European markets over the past two weeks.

Prilled urea avoids incurring the additional energy costs of granulation and we estimate that it would cost roughly €360-400/t to produce, while market prices in Benelux were this week at around €415/t fca.

CAN and AN also look only marginally profitable at current market values. CAN prices have fallen by around 10pc over the past two months, with the key German reference now around €310-315/t cif inland — while production costs are estimated at €290-315/t ex-works. Ammonium nitrate producers face a similarly challenging position with production costs estimated at €330-360/t for granulated material.

Previous losses in affordability in 2021 and 2022 prompted sharp increases in nitrogen prices as many factories shut down for extended periods, leading to a massive wave of urea and ammonium sulphate imports to replace the lost production.

But the supply situation is not as dire — the previous periods saw producers facing potential losses of hundreds of euros per tonne of fertilizer — and indeed factories including Romania's Azomures and Croatia's Petrokemija have recently restarted some production. Buyers too have been reluctant to warehouse much price risk ahead of farm demand, which remains seasonally low in Europe, because of losses on similar positions this spring.

Natural gas prices have risen mostly in response to a sharp swing in weather forecasts, alongside heightened energy security concerns and uncertainty over the effect of a new Bulgarian tax on Russian gas transit.

France urea market prices vs production costs $/t

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Egypt’s Misr Phosphate launches low-dust phosphate rock

Egypt’s Misr Phosphate launches low-dust phosphate rock

London, 19 February (Argus) — Major Egyptian phosphate rock producer Misr Phosphate is selling rock with reduced dust content for shipment to Europe and Latin America from Damietta port in the Mediterranean. The producer has built a facility at the Abu Tartour phosphate mine in southwestern Egypt to remove particles measuring less than 80 micrometers from crushed phosphate rock. It says the process reduces dust by about 80pc while raising the P2O5 content by 1.0-1.5pc and cutting the heavy metal content. The ‘de-dusting' facility at Abu Tartour at present is running at an output of about 1,000 t/day (t/d), with the potential to reach capacity of about 2,000 t/d in the second quarter of this year. Misr Phosphate began marketing the low-dust rock at the end of 2024. So far, 15,000t of the product — ranging from 27-29pc P2O5 — has shipped to southern Europe. A further 7,000t — containing 26-27pc P2O5 — is set to complete loading at Damietta for shipment to Brazil this week. Misr Phosphate also will load 15,000t of low-dust rock in March for shipment to Brazil and a further 20,000t in April for shipment to Spain. The prices of the cargoes sold are not yet known but are likely to be higher because of the added processing costs. High levels of dust in Egyptian phosphate rock previously excluded the product from many markets because of environmental regulations at discharging ports. Misr Phosphate says the low-dust cargoes delivered to European ports so far have unloaded successfully. Misr Phosphate is the sole license holder for mining phosphate rock in Abu Tartour. It also holds licenses to operate in El Sabaia and Red Sea mines further east. Misr Phosphate last year produced about 6.7mn t of phosphate rock of all grades, about 3.7mn t of which were exported. It targets 7mn t of phosphate rock production and 4mn t of exports for this year. Total Egyptian phosphate rock exports were 5.2mn t last year and are anticipated to reach as high as 6mn t this year, Egyptian marketing company for phosphate and fertilizers (EMPHCO) said. Egyptian rock exports totalled 680,000t in January, including 273,000t that were shipped to India. EMPHCO expects Egypt to export 1.2mn t of phosphate rock this quarter. By Tom Hampson Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EU draft plan seeks to cut energy costs


19/02/25
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19/02/25

EU draft plan seeks to cut energy costs

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Australian fertilizer, copper, zinc rail line to reopen


19/02/25
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19/02/25

Australian fertilizer, copper, zinc rail line to reopen

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Peru backs Saudi critical minerals hub plan


15/02/25
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15/02/25

Peru backs Saudi critical minerals hub plan

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Weather to set the tone for ferts in Argentina


14/02/25
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14/02/25

Weather to set the tone for ferts in Argentina

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