Shanxi power crunch affects fertilizer output

16 July 2008 10:24  [Source: ICIS news]

SHANGHAI (ICIS news)--A power crunch caused by coal shortages has forced nearly 10 of the 30 nitrogen fertilizer producers in China’s Shanxi province to stop production since May impacting output severely, said producers on Wednesday.

"Many coal mines in Datong and Shuozhou of Shanxi have been closed on Olympics restrictions, we have to transfer coal material from Shaanxi province, hence adding to cost," said a local producer.

Shanxi province, which produces one-fourth of China's coal output, has lost approximately 5m KW of power, the highest level recorded in recent years.

Jinyuan Co, a Shanxi-based fertilizer producer shut down its 60,000 tonne/year synthetic ammonia plant after its production costs increased by yuan (CNY) 350/tonne ($51/tonne) year on year.

"As far as we know, about seven companies nearby had stopped production," said Lijinshan, manager of Jinyuan Co.

Zhong’an Chemical also shut down a 60,000 tonne/year synthetic ammonia unit and one 100,000 tonne/year urea plant.

"Coal prices have increased by CNY500/tonne in the past year to reach about CNY1,000/tonne. We lose about CNY300/tonne on producing fertilizer now," said a company official.

($1 = CNY6.82)

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By: Dolly Wu
+65 6780 4359



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