A major fertilizer producer in Great Britain is shutting down production due to excessively high natural gas feedstock costs.
CF Fertilizers U.K. Limited, a subsidiary of CF Industries Holdings Inc., had previously announced a suspension of operations back in the fall, and is now seeking to financially restructure itself entirely amid the changing global economy for energy.
A continued surge in European gas prices has reportedly made it too expensive for CF to continue procuring natural gas, which in raw form is a key ingredient used to make nitrogen fertilizers.
It no longer makes financial sense, in other words, for the company to continue doing what it was doing previously, at least not as long as prices remain as high as they currently are.
As of this writing, European gas prices are hovering around $23 per million British thermal units (MMBtu), while U.S. natural gas futures have settled around a seven-year high of $5.460 per MMBtu.
According to Ben Isaacson, an analyst at Scotiabank, CF has no choice, financially speaking, but to shutter its two U.K. plants. Incremental losses, however, should not continue because the company’s UK assets generate only about 2.5 to 3 percent of quarterly EBITDA.
“This is why we think investors should look past CF idling the plants,” Isaacson wrote in a memo.
CF currently does not have a timeline estimate for when it might resume its U.K. operations. Several ammonia plants it operates in Donaldsonville, Louisiana, however, have resumed operations after being temporarily halted due to Hurricane Ida.
In a corporate communications statement, CF explained that its goal is to restructure its U.K. business with long-term profitability and “sustainability” in mind – sustainability, in case you were unaware, is often used as a dog whistle term for depopulation.
The company’s Billingham plant is the largest producer of ammonia, ammonium nitrate (AN) and carbon dioxide (CO2) in the country. CF says it is “better positioned for long-term sustainability” than its other facility near Chester.
The Billingham plant alone is “better positioned for long-term sustainability as it has sufficient capacity to meet all forecasted domestic demand for AN fertilizer,” the company said.
The company’s Ince facility, on the other hand, has not produced ammonia since September 2021, which is not that long ago. Shutting this one down permanently still aligns with the company’s long-term goals, it said, despite reduced overall output.
Reading between the lines, it sounds a lot like there is soon to be a mass die-off. Perhaps due to Wuhan coronavirus (COVID-19) “vaccines?” This would explain why there will be much less demand for fertilizer in the future.
As long as fuel prices remain high – and this appears to be the case currently and for the foreseeable future, more than likely by design – then it will no longer be cost-effective to produce fertilizer from it, at least in the United Kingdom. This will mean much lower crop yields moving forward, which means food shortages at the current population levels.
CF was given a grant back in the fall to continue operations temporarily with the hopes that energy prices would eventually settle back down. Since that did not happen, we are now watching the dominoes fall as the global food supply, powered by natural gas-derived fertilizers, gets decimated.
Keep in mind that natural gas is also required to heat homes. The U.K. and Europe – and realistically, the entire world, based on where things are headed – are in for a really dark winter this year and next.
You can track the collapse of the global economy at Collapse.news.
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