Yara to cut Trinidad ammonia output in August

Norwegian fertilizer producer Yara is bringing one of its two ammonia plants in Trinidad offline in August because of the weak market conditions caused by the Covid-19 pandemic.

The Tringen 1 500,000t/yr plant will undertake maintenance work and come back on line as soon as market conditions recover, Yara said. The company announced on 3 July that the plant would close down on 7 July, but Yara has now decided to push back the decision to take advantage of new opportunities for competitive export in July, and optimise preparation for planned maintenance work.

The slowdown in global industrial ammonia demand has now brought three ammonia plants offline on the island, following Nutrien's decision to bring two of its four ammonia units offline until market prices recover. The latest cutback will remove a further 40,000t/month from the export market.

The competitiveness of Trinidadian ammonia has been squeezed further due to sustained cheap gas pricing in competing production regions, such as the US and Europe.

The Tringen 1 plant has been running at a lower rate of production than the 495,000t/yr Tringen 2 plant this year. Tringen 1 produced 156,500t in the January-April period this year, averaging 39,125t/month, while Tringen 2 produced 175,000t over the same four months, the equivalent of around 43,750t/month.

Yara shut down its oldest and smallest plant on the island, Yara Trinidad, in December 2019 due to the high cost-of-production at the site.

Spot ammonia prices have fallen by over $50/t in the past three months and are currently in a range of $150-170/t fob Caribbean/US Gulf. Several plants are reported to running below production cost at this price level. Exports from Point Lisas in the first half of 2020 are running around 18pc behind last year's levels.

By Ruth Sharpe