Yara International reports that higher fertiliser prices have more than offset increased production costs for its European activities in the latest quarter, with product deliveries down by 6% year-on-year in the region.
The multinational company made an operating income of $0.79 billion from revenues of $6.22bn in the three months to September 30th 2022, compared to $0.12bn and $4.89bn in Q3 2021. At the nine-month stage of the financial year, operating income was $3.05bn on revenues of $18.59bn ($0.92bn and $11.58bn a year earlier).
Global gas feedstock prices averaged $23.9MMBtu in the latest quarter ($9.5MMBtu in Q3 2021), while in Europe they were $34.5MMBtu ($11.5MMBtu).
Global finished fertiliser volumes totalled 4.6 million tonnes in the latest quarter (5.45m tonnes in Q3 2021) with 13.93m tonnes in the year to date (15.69m tonnes).
In Europe, total deliveries were 1.98m tonnes in the latest quarter, from 2.1m tonnes a year earlier. By product, urea deliveries were 0.107m tonnes (0.203m tonnes); nitrates 0.93m tonnes (0.897m tonnes) and NPK products 0.557m tonnes (no change).
Looking ahead, Yara says the need for food security is supportive to its markets. “Global nitrogen prices have strengthened significantly over the past year, driven by continued demand growth and supply limitations linked to Chinese exports, war in Ukraine, sanctions and natural gas price increases,” it notes.
But natural gas prices remain unprecedentedly volatile in Europe. “Yara continues to adapt to market conditions and has curtailments in several of its production plants, currently amounting to an annual capacity of 1.7m tonnes of ammonia and 0.9m tonnes of finished fertiliser.
“In Europe, farmers have sought to secure part of their fertiliser needs for the spring application during the third quarter, while other regions have seen a more pronounced slowdown in buying. In Europe, fertiliser inventories remain at historically low levels, and there is a risk of nitrogen shortages and price spikes during winter, especially if natural gas availability deteriorates.”
Yara president and chief executive said Svein Tore Holsether says Yara’s resilient business model continues to perform well despite the challenging operating environment, extreme price volatility and plant curtailments in Europe. “However, we remain deeply concerned about the food and fertilizer supply situation in Europe and globally and repeat our call for urgent action to reduce dependency on Russia,” he warns.