Today’s announcement from Grupa Azoty concerns the temporary suspension of new orders for nitrogen fertilizers. This decision is a direct response to the rapid and unpredictable surge in natural gas prices on global markets.
1. Causes and Scale of Increases Raw Material Shock: Gas prices on
- European exchanges (TTF) have risen by approximately 35–50% over the last two days, with today’s trading sessions bringing further spikes of about 30%.
- Geopolitics: The primary drivers are the destabilization of the Middle East (conflict involving Iran) and the shutdown of production at key LNG facilities in Qatar (Ras Laffan), which has severely restricted supply.
2. Key Decisions by Grupa Azoty
- Order Suspension: Effective March 2 (4:30 PM), Grupa Azoty has stopped accepting new orders for nitrogen fertilizers and has withdrawn current price lists for these products.
- Fulfillment of Existing Agreements: The company emphasizes that production at its plants remains uninterrupted, and all orders placed prior to the announcement will be honored under the original terms.
- Exceptions: Orders for compound fertilizers (where gas accounts for a smaller portion of production costs) have not been suspended.
3. Market Outlook
Grupa Azoty reassures that there is no threat to the fertilizer supply in Poland. The company opted to suspend offers rather than implement the drastic price hikes seen from competitors in Egypt or the USA. The strategy is to „wait out the market madness” and avoid transferring extreme costs to farmers during this peak period of instability.
The situation remains dynamic. The company is monitoring market quotes closely to restore sales as soon as the raw materials market stabilizes.