European ammonia production costs exceed imports as gas prices surge

The cost of domestic European ammonia production has outstripped the cost of imported tons for the first time since June 2025, tracking soaring natural gas prices, data from Platts, part of S&P Global Energy, showed.

Platts estimated the cost of domestic ammonia production at $697/mt on March 3, while the import price was assessed by Platts at $690/mt CFR duty paid/duty free, excluding Carbon Border Adjustment Mechanism, up $5/mt day over day.

The estimated cost of production has risen more than $250/mt since Feb. 27, before the beginning of the war in the Middle East.

The import price has risen $5/mt on the back of the conflict, but amid stable demand so far. Including CBAM costs, the estimated total cost to a European importer for a cargo with a 2.2 mt CO2e carbon intensity would be $750/mt.

European fertilizer producers have already begun reacting to the increase in the feedstock cost, with LAT Nitrogen saying March 3 they would withdraw all offers until further notice and reduce the production of ammonia to "technical minimum level."

One European producer told Platts they were "carefully considering" their own ammonia production. "Costs are shooting up," they said.

They warned fertilizer prices would rise.

"Fertilizer prices will increase enough to support EU production. If not, ammonia will be imported. If not enough ammonia, fertilizer prices will rise," they said.