EPCA ’22: European shut ammonia production unlikely to return – analyst
BERLIN (ICIS)–The 70% of European ammonia production which has been shut down on the back of high natural gas costs is unlikely to return, an analyst at Boston Consulting Group (BCG) said on Tuesday.
Andreas Gocke, global lead for chemicals at BCG, said natural gas prices in Europe are also unlikely to return to levels prior to the war in Ukraine, putting a strain on ammonia producers for whom gas is the main feedstock.
Gocke was speaking to delegates at the European Petrochemicals Association (EPCA) annual meeting at a session titled ‘Competitiveness of European chemical industry’.
“[Before the war] The entire cash cost of ammonia production in Europe was already bad, but [with current gas prices] there is a brutal translation: there is no chance anymore for cost-competitive production of ammonia in Europe,” said Gocke.
This will have an impact not only on fertilizers production, he added, but also for downstream products such as polyamide 6 (PA6) or by-products from ammonia production such as carbon dioxide (CO2), which is used in a variety of industrial sectors, not least the food and drinks sector.
“We have modelled how the European natural gas price could develop [in coming years and we modelled that] we will not get back to the levels we had in 2019 – this has very strong implications,” concluded Gocke.
The EPCA annual meeting runs from 4-6 October in Berlin.
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