Page 13 - EurOil Week 34 2022

EurOil PROJECTS & COMPANIES EurOil

Poland’s Azoty halts as

high gas prices sting

POLAND ONE of Europe’s biggest fertiliser producers, Orlen – also said on August 23 that it would sus-
Warsaw-listed Polish chemicals group Azoty and pend production of nitrogen fertilisers due to
Fertiliser production has its listed unit Pulawy have suspended or reduced high prices of gas.
been hard hit by high production of some products, including nitro- The news will affect Polish farmers, who are
gas prices, and this gen fertilisers and ammonia, due to skyrocketing one of the key voter constituencies for the ruling
exacerbates the food prices of gas, the companies said on August 23. Law and Justice (PiS) party.
crisis. “Due to record prices for natural gas, the “Farmers may be uneasy about [the cut in
main production feedstock used by Grupa Azoty production] but there are well over 100,000
… the company decided that as of August 23, it tonnes of fertilisers in Grupa Azoty’s warehouses
will temporarily shut down its nitrogen fertiliser, … There will be enough for the autumn season,”
caprolactam and polyamide 6 production units,” Agriculture Minister Henryk Kowalczyk told
the company said in a market filing. PAP.
Pulawy said that it would cut its ammonia Dutch TTF Gas Futures hovered around €260
output to “about 10%” of production capacity. per megawatt-hour (MWh) for September deliv-
“Although there are no problems with the eries on August 23, up from below €90 in late
availability of gas, the current situation in the May and nearly ten times more versus August
gas market, which determines the profitability 2021.
of production activities, is extraordinary and The price rally owes to Russia’s cutting sup-
completely beyond the control of [the group], plies to Europe, which is desperate to fill stor-
and could not have been predicted,” the two age ahead of winter to ease a looming gas crisis
companies said in similarly-worded statements. brought about by Russia’s waging war against
“There is no doubt that such large reduction Ukraine and the West’s sanctions on the Kremlin.
of output must affect Azoty’s results in a very While in indirect conflict over Moscow’s war
significant way. It is unknown yet how long [the in Ukraine, Europe remains much dependent on
stoppage] will take, whether it is a question of Russian gas supplies, cutting or reducing which
one week, month or quarter,” Lukasz Prokopiuk, is now expected to bring a major economic slow-
an analyst with DM BOS brokerage, told the state down, if not recession, in the EU.
newswire PAP. EU leaders keep accusing Russia of manipu-
Such low production coupled with high fixed lating supplies to stoke an economic and energy
costs will generate negative Ebitda on a daily crisis in the cold season to weaken Europe’s sup-
basis. In July, output was higher, but if the stop- port for Ukraine.
page continues until mid- or end-September an Grupa Azoty’s stock fell 5% to PLN34.2
Ebitda loss in Q3 will be possible. (€7.17) on the Warsaw Stock Exchange on
Meanwhile, another Polish fertiliser maker, August 23. Pulawy’s share price dropped 2.18%
Anwil – which is owned by energy giant PKN to PLN71.8. ™

Week 34 26•August•2022 www. NEWSBASE .com P13