Cold weather shutters some US fertilizer plants

High demand for natural gas feedstock and low availability, both resulting from cold weather, have caused US fertilizer producers from Texas north to Nebraska to idle plants this week.

Texas producers shut down nitrogen production before the weekend that will likely remain off line for most of the week. PCI Nitrogen stopped ammonium sulfate production on 13 February and all other operations, including its sulfuric acid plant, on 15 February. Nutrien's Borger facility is off line though the producer anticipates restarting by the end of the week.

In Oklahoma, gas distribution company Enable Gas Transmission yesterday required all industrial consumers of natural gas to cease offtake to preserve supply for the "human needs" of electricity generation and residential gas supply. Several large plants operate in Oklahoma, including Koch's Enid facility and two CF Industries plants. Koch and CF Industries chose not to comment.

In Nebraska, Koch's Beatrice plant cut its gas offtake by about 90pc on 13 February, according to gas transmission data and flows are still minimal today.

But Louisiana plants appear to have remained on line this week. CF Industries' Donaldsonville facility was still operating as of yesterday, participants said, while Nutrien's Geismar site was also running yesterday evening.

The situation in the Midwest is mixed. Iowa plants — including OCI's Wever facility, CF Industries' Port Neal and Koch' Fort Dodge — are reported off line but the producers did not confirm this. Nutrien's Lima, Ohio, facility, though was still operating last night.

The affected facilities represent around 5mn st/year of urea production capacity, or 90,000st/week, as well as considerable volume of UAN and ammonia.

Though near-term retail fertilizer demand is low because of the widespread cold weather, lost supply because of the shutdowns will likely be felt in a snug market when demand returns.

Natural gas supply has been severely affected by widespread cold weather across most of the nation which shut off some production facilities while increasing heating demand. Same-day natural gas prices across wide swaths of the country are at historic levels — Texas' Katy hub rose to $377/mmBtu yesterday — in attempts to ration demand and draw in supply.

By Bede Heren