The local ammonia sector continues to reel under a slump in international prices as another plant at the Point Lisas Industrial Estate will be shuttered this month.
As of July 7, the Tringen I plant will stop producing ammonia “due to current market conditions”, Tringen’s parent company Yara International announced in a statement on Friday. While the plant is down, planned maintenance will be done by employees, the company said. This is the second plant in Trinidad to be closed by the Norwegian group.
“The COVID-19 global crisis has put ammonia markets under significant pressure due to a reduction in industrial ammonia demand. The competitiveness of ammonia produced by Tringen has also been impacted due to a fall in natural gas prices paid by competing ammonia producers in major markets,” Yara said.
Tringen I has a production capacity of an estimated 500,000 tonnes per year.
“The plant will resume operations at the earliest possible time when market conditions are supportive.”
The company did not say what will be the fate of its third ammonia plant Tringen II.
Last December 31, Yara shut down Yara Trinidad, the smallest of the three plants it operates in Pt Lisas. The other two are Tringen I and Tringen II which Yara jointly owns with National Enterprises Ltd, TT’s investment holdings company.
On November 13, Yara had announced a fall in profits and failed negotiations on gas supplies with the National Gas Co (NGC) were keys reasons for the closure of Yara Trinidad.
At the time, the company and the Oilfield Workers Trade Union were in discussion on separation packages for affected workers.
In response then, the NGC assured it would maintain gas supplies to customers. NGC had said the Yara plant contributed five per cent of ammonia production with an annual output of 270,000 tonnes.
NGC said it also felt the effects of the volatile local and global energy industries.
Just last month, another ammonia producer, Nutrien shuttered its plant which it said would remain down amid the price slump.
The plant was initially shut down on June 12 for maintenance work, however, when this was completed it remained closed for another 14 days.
Nutrien Trinidad said then it was monitoring the global market price of ammonia to determine its next move. In May, PCS 02 was also shuttered due to economic challenges.
A recent International Commodity Information Service (ICIS) report said ammonia prices would remain “bearish” in June, quoting a US$218 per tonne estimate. Prices are falling due to an oversupply, stated ICIS.
Credit: Source link