Poland’s Anwil restarts fertilizers production ‘for sake of food security’

LONDON (ICIS)–Poland’s PKN Orlen on Monday announced that its Anwil subsidiary is to restart its nitrogen fertilizers production “for the sake of food security”.

The move comes just one week after state-controlled PKN Orlen said Anwil was shutting down its 965,000 tonnes/year fertilizer facility for an indefinite period because of record high natural gas prices in Europe.

“PKN Orlen informs that for the sake of the food security in the country and of the health protection in Poland, despite the difficult macroeconomic conditions, Anwil decided to resume the production of nitrogen fertilizers,” said the Polish energy and petrochemicals major.

On Tuesday last week, ICIS reported that soaring natural gas prices in Europe had led to at least 13.5m tonnes of fertilizer and chemical capacity being shut down or run at reduced rates, representing up to 63% of regional capacity for the worst-affected products.

Just prior to the closure announced by Anwil last week, fellow Polish state-controlled fertilizer producer Grupa Azoty also cited record-high natural gas prices as it announced that it had temporarily halted production of nitrogen fertilizers, caprolactam (capro) and polyamide 6 (PA6) production.

Subsequently, on Tuesday last week, Azoty said its Zaklady Azotowe Kedzierzyn (ZAK) subsidiary would cut the output of its nitrogen fertilizer plant to “a minimum”, namely 43% of capacity.

On Wednesday last week, Azoty unit Grupa Azoty Zaklady Azotowe Pulawy (ZAP) stopped melamine production due to steep gas prices.

Grupa Azoty is Europe’s second largest fertilizer producer, behind Norway’s Yara.

On Thursday last week, also pointing to extraordinarily high gas prices, Yara said it was implementing further curtailments to its fertilizer production, which would take its total European ammonia capacity utilisation to around 35%.

Azoty estimated that its natural gas pricing increased from €72 per megawatt hour (MWh) on 22 February to €276/MWh on 22 August.

Anwil – which is working on a third nitrogen fertilizer production line at its Wloclawek, central Poland, production site, which is scheduled for completion by the end of this year and would raise the company’s fertilizer capacity to 1.46mn tonnes/year – was planning to carry out maintenance and investment works during the shutdown.

In June 2019, Azoty warned that Anwil’s construction of a third nitrogen fertilizer line “may lead to a supply glut and a price war” in Poland.

Front page picture: Anwil’s facilities in Wloclawek, Poland
Source: Anwil