High oil prices force two UK fertilizer plants to close


UK Energy Update

Soaring natural gas prices have forced the closure of two fertilizer plants in northern England, which is one of the first signs that global supply constraints may force many energy-intensive industries to scale back activities this winter.

Due to high gasoline prices, CF Industries Holdings, a New York-listed fertilizer group, will stop production at its plants in Billingham and Ins, Cheshire. The organization said in a statement that it “does not estimate when the factory will resume production.” Statement overnight.

Centrica, British Gas Owner Early warning The tightening of global supply may force heavy industry to restrict production during the winter. The trade agency British Steel also warned this week that some of its members suspended operations at certain times of the day when energy prices were “dazzling”.

In recent weeks, natural gas prices in the United Kingdom and Europe have soared to new highs as traders warned that continental Europe is entering a critical heating season and inventories are at record lows. After the continued cold weather last winter, inventories were at a low level, while reduced supplies from Russia and strong demand for liquefied natural gas (LNG) in Asia limited the injection of storage facilities in the summer. The tightening of natural gas has had a knock-on effect on electricity prices.

CF Industries’ Inc. plant has been in operation since 1965, has 400 employees and produces approximately 1 million tons of fertilizer According to the company’s UK website, one year. The Billingham factory has 190 employees.

Rajiv Gogna, a partner at LCP Energy Analytics, said: “Companies directly facing these prices may struggle this winter because these prices do not seem to show signs of slowing down.”

The closure may increase the pressure on British ministers and British energy regulator Ofgem to take action to protect industry and households.

British Steel’s director-general Gareth Stace said earlier this week, “ [UK] As this situation continues, the government and Ofgem must be prepared to act”, adding that “the situation is becoming more urgent every day.”

In the UK, the already high natural gas price this week is due to Fire on major British submarine cables Import electricity from France. The IFA1 cable usually has a capacity of 2 gigawatts and will only operate at half the capacity before the end of March next year after the incident. Analysts believe that in the next few weeks or even months, the country will have to rely more on gas-fired power stations.

The British government has been contacted to comment on the closure of the fertilizer plant.

Tom Wilson reports from London


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