Energy Costs Lead to Cutbacks

Chemical and fertilizer companies on both sides of the Atlantic are cutting back production because of high energy and raw material prices. Fertilizer maker Mosaic will temporarily reduce production at several of its North American phosphate and potash plants because of high raw material costs and a slowdown in domestic and offshore demand. Terra Industries has indefinitely suspended all production at its Woodland, Okla., fertilizer facility in order to perform mechanical repairs and catalyst changes. The company says it will not resume output at the plant in the near term, in part because of high natural gas costs, which have not been offset by increases in selling prices for nitrogen products and methanol. Likewise, Terra has cut back nitrogen fertilizer production in the U.K. in the wake of gas costs there that have more than tripled since mid-November. The company estimates that the price increases were adding a total of nearly $3.5 million per week to its U.K. production costs. And Ineos Chlor is cutting back chlorine production at its site in Runcorn, near Liverpool, England. The company says it is trimming between a third and a half of its daily chlorine production, depending on the price of natural gas.