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Fertiglobe Plc, the largest fertilizer maker in the Middle East, said the global market will remain tight with more European rivals likely to cut production due to surging costs for natural gas, a key feedstock.
“We could see more coming offline” in Europe, Fertiglobe Chief Executive Officer Ahmed El-Hoshy said in an interview with Bloomberg Television. “Even at today’s elevated prices for ammonia and urea, much of Europe is operating well below cash costs. Some companies will have a difficult time with these unprecedented hydrocarbon prices.”
The price of gas, the main input for the nitrogen-based fertilizer produced by Fertiglobe, has surged in the past year, especially since Russia invaded Ukraine in February and slashed supplies to Europe in retaliation to sanctions. Last month, European fertilizer giant Yara International ASA said the energy crisis has forced it to reduce output and warned of more curbs.
Fertiglobe, which has factories in the United Arab Emirates, Egypt and Algeria, has seen sales to Europe rise in the past year as competitors based on the continent come under pressure. The company benefits from being able to buy cheaper gas from the Middle East. Abu Dhabi National Oil Co., the UAE’s state energy firm, owns around 36% of Fertiglobe.
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