Second-Largest Fertilizer Producer in Europe to Halt Operations Amid High Gas Prices

AGF Nitrogen, the second-largest producer of ammonia and fertilizers in Europe, has ceased operations on several of its lines, and additional units could be shut down in the coming weeks. This was reported by Agroportal, citing statements made by company CEO Petr Cingr to Reuters.

According to the company head, the difficult decision was driven by soaring natural gas prices and a sharp contraction in market demand. Surging global gas prices, triggered by conflicts in Ukraine and the Middle East, have driven up production costs for AGF Nitrogen (part of the Agrofert conglomerate). Combined with shipping restrictions in the Strait of Hormuz, these factors have made fertilizer prices unaffordable for many European farmers.

Petr Cingr noted that AGF Nitrogen is already operating its nitrogen plants at a minimal capacity ranging from 80% to 85%. However, given current market conditions, output levels remain too high. He explained that either the market must start purchasing products immediately, or the company will be forced to shut down additional plants within a few weeks because storing the excess output is simply impossible.

AGF Nitrogen has already stopped one production line in France, while another is operating intermittently, Cingr stated, adding that restarting each facility costs several million euros. The company operates a total of eight ammonia production plants located in France, Germany, Slovakia, and Austria.

The group's total annual capacity stands at 3.5 million tons of ammonia and 7 million tons of fertilizers, accounting for roughly 20% of the European market. Nevertheless, due to high prices, farmers' fertilizer procurement volumes have plummeted to a minor fraction of typical levels, though demand could eventually rebound when growers face severe time constraints ahead of the next season.