Azomureş announced on Tuesday that it has decided to resume the production of fertilizers and products for industry, but until the confirmation by the Government of the package of subsidies, it will exercise caution and will work under the normal production capacity.
“Azomureş is starting to restart some installations on the platform. From the beginning of May, the production of fertilizers and products for the industry will resume”, it is shown in a press release of the company.
The company’s position states that 4 months have already passed since the decision to temporarily stop fertilizer production, on December 17, 2021, in the context of the volatility of the natural gas market.
“Throughout this period, Azomureş together with Fertilizers Europe drew the attention of the European Union and the Romanian Government that the energy shock could lead to a fertilizer and food crisis. Especially in the context of restrictions on Ukrainian and Russian exports through the Black Sea, experts estimate that 30% of world grain exports are directly affected and this has an increased effect on the lack of fertilizers, and the European Commission intervened in early April to try to prevent this food crisis by establishing a legal framework in which Member States can support companies. Poland (EUR 836 million) and Germany (EUR 20 billion) have already provided substantial aid packages, with special provisions for fertilizer producers,” says the press release, according to Agerpres.
According to Azomureş, the Romanian government has not yet established anything concrete, but the Ministries of Energy, Economy and Agriculture are working in consultation with industry representatives to launch an aid package similar to those launched in other European countries.
“All this leads to the partial resumption of production in Azomureş. The supply of natural gas remains difficult, with price levels leading to high costs for fertilizers, even with the help of the Government. Therefore, until the confirmation of the subsidy package, we will remain cautious and at the same time below normal production capacity, but at the same time we consider it essential for a successful 2022-2023 agricultural campaign not to postpone the restart. We anticipate a limited production of Ammonium Nitrate, Nitrocalcar, Urea and Melamine in the first period, and the production of NPK complex fertilizers will start in the next period,” Azomureş general manager Harri Kiiski was quoted as saying in a statement.
According to the quoted source, in December last year, the gas market reached record levels, which made it impossible to produce fertilizers at affordable prices, not only for Azomureş, but also for many other EU factories that stopped during the same period.
“In the context of Russia’s invasion of Ukraine, the EU energy market has gone from ‘unprecedented highs’ to ‘total crisis.’ While the gas market in December seemed unmanageable in the range of 90-120 EUR/ MWh TTF (European standard exchange), the same benchmark peaked at almost 345 EUR/ MWh in early March, and gas availability gradually declined as access to Russian gas supplies became more difficult due to EU sanctions,” emphasizes in the statement.
Azomureş specified that the annual production (under normal operating conditions) is of 1.6 million tons of fertilizers, approximately 75% of the production being destined for Romanian farms, but it also supplies raw materials (Urea and Melamine) for several industrial objectives in the country.
Azomureş from Târgu Mureş announced in a previous statement on March 28 that it could resume production of fertilizers for agriculture with the launch of the European support package for energy-intensive industries, but the resumption schedule also depends on gas availability for the Romanian market. According to the statement from the Mureş company from March 28, it was estimated at that time that half of the installations would start in a first phase in April and the other installations in May.