LAT Nitrogen halts sales to Germany on high gas costs

Spanish Market: Fertilizers
14/11/24

Major European producer LAT Nitrogen has withdrawn from the German market today owing to a surge in gas costs.

LAT Nitrogen produces nitrogen-based products for the fertilizer and industrial chemical markets. It sells CAN, ASN and NPK 15-15-15 to the German market.

"We will closely monitor the development of gas prices before considering a return to the market," LAT Nitrogen market intelligence and demand planning analyst Harald Lindner said.

Front-month natural gas prices on the Dutch TTF have climbed steadily over the past two months, reaching more than €45/MWh today, up by €10/MWh from September.

CAN is a key nitrogen fertilizer used in the German market and spot prices have stagnated at about €280/t bulk cif inland and have failed to grow ahead of the season, despite higher list prices. Yara raised its CAN asking price on 16 October to €305/t bulk cif inland for delivery to Germany and the Benelux countries, up from its previous offer of €295/t bulk cif inland.

Buying interest from farmers has been incredibly slow ahead of spring applications this year. Market coverage in Germany for nitrogen fertilizers for the 2024-25 fertilizer year is estimated to be 40-45pc, down from an average of 60-65pc by mid-November.

Weak grain prices, reduced farm incomes and warehouses full of unsold agricultural produce are also said to be behind the lack of demand for fertilizers from consumers. Some wholesalers are expecting sales to remain slow until the start of 2025, which will give distributors logistical challenges to deliver product ahead of early spring applications.

LAT Nitrogen began maintenance in mid-September on some of the lines at its Linz site in Austria, affecting downstream fertilizer output of ammonia, nitric acid, CAN and NPKs. This was due to be finished by early November.

The Linz site is a major source of fertilizers for central and eastern Europe, with CAN 27 annual production roughly at or above 600,000t in typical recent years, according to latest IFA data. The 429,000 t/yr prilled urea plant at Linz was unaffected by the maintenance and is running as normal.

By Suzie Skipper

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