Gas strikes again: German ammonia production reduced

After the United Kingdom and Austria, it is Germany's turn to fall under the blows of gas. SKW Piesterritz , Germany's largest ammonia producer, announced on Tuesday a 20% reduction in ammonia production due to record natural gas prices.

" The level that has been reached now no longer allows for economically sound production, so we are forced to take this step, " the company told Bloomberg in an e-mailed statement.

" Without government action, there is a risk that production will be stopped shortly ," the statement continues.

We have already seen this story last month: companies go into crisis due to the too high price of natural gas, and then they close their plants, putting many food sectors in crisis, from chemicals to food. Then the government intervenes with emergency aid to restart at least one of the plants.

As an upgrade, natgas is used to synthesize ammonia for nitrogen fertilizers for the agricultural industry, and a by-product is CO2, which is used heavily in the food industry, for food packaging, for stunning animals in slaughterhouses and for fizzy drinks.

here's how the price of natural gas is doing in Europe:

The main reason behind the increase in natgas prices is the drastic reduction in gas flows from Russia. The main European supplier, Russia, in German Mallnow via the Yamal-Europe pipeline, plummeted 28% yoy in September.

Bloomberg

Meanwhile, European politicians have tried to blame the cause of the European energy crisis on the Kremlin and Gazprom in hopes of deviating from their deplorable mismanagement of the continent's energy grid. Russia announced this week that the Nord Stream 2 pipeline has begun filling up with gas in the front line pending approval from German regulators, which could take months as the continent's natural gas stocks drop below seasonal averages. before winter.

This means that a shortage of basic chemicals can increase food inflation, just as the global economy could stumble over a period of stagflation. Or that European production on international markets is about to be displaced by those of countries where energy has not grown as in Europe.

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The article Gas strikes again: German ammonia production reduced comes from ScenariEconomici.it .

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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-gas-colpisce-ancora-ridotta-la-produzione-di-ammoniaca-tedesca/ on Thu, 07 Oct 2021 07:00:13 +0000.