High natural gas prices cause UK fertilizer factories to close

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UK manufacturers have warned in recent weeks that soaring natural gas prices will force them to close factories, and that prediction is now coming true.

CF Industries, a global producer of agricultural fertilizers, said on Wednesday evening it would shut down operations at two factories in northern England due to high natural gas prices. The company said it didn’t know when production would resume.

CF uses large amounts of natural gas to produce hydrogen in a process that makes ammonia for fertilizers.

Wholesale natural gas prices are at their highest level in years and have more than doubled since the spring. The main causes are a resurgence of global demand, especially in Asia, and concerns that European countries are not putting enough fuel in stock to prepare for winter.

Rising natural gas prices in turn lead to very high electricity prices as the fuel is used in many power plants, putting pressure on both consumers and industry.

UKSteel, an industry group, said Wednesday its members faced “sky-high” electricity prices and said some steelmakers were forced to shut down during periods of extremely high tariffs.

On Wednesday, a fire that cut a cable bringing electricity from France led to a new surge in electricity prices. Kent Fire and Rescue, which used up to 12 fire engines to fight the blaze, said Thursday firefighters had completed their work at the scene and the cause of the blaze had not been determined.

National Grid, Britain’s main electricity supplier, said the part of the cable damaged by the fire would be out of service until March. Another part of the cable was offline due to a planned outage and will be back online on September 27. Together, cable can provide enough electricity to power two million homes.

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