INTERVIEW: Germany’s SKW raises fertilizer production despite gas price rise

Even as European natural gas prices remain elevated amid the persistent trade disruptions from the Iran war, fertilizer and chemicals producer SKW Stickstoffwerke Piesteritz, one of Germany's largest gas consumers, is operating "more or less" at full capacity for the first time in three years, CEO Petr Cingr told Platts in an interview April 21.

"We can run at full speed and serve our customers in Europe," he said.

Gas is a key feedstock for SKW, which consumes about 14 TWh/year (1.3 Bcm) to produce ammonia when fully operating, according to Cingr. Since the start of the Iran war, the Platts month-ahead Dutch TTF gas price has climbed as high as Eur61.94/MWh. While the index has since subsided, it remains some 27% higher than before the war began, as of April 20.

During a bullish period in early 2025 that saw the Platts month-ahead TTF price surge to just below Eur60/MWh, SKW temporarily shut down one of its two ammonia plants. Platts is part of S&P Global Energy.

This time is different, however, because fertilizer prices are also rising. Platts assessed the FCA France granular urea spot price at Eur760/metric ton April 20, 51% higher than just before the start of the war in the Middle East.

Fertilizer flows fall

The jump is because, in addition to cutting off about 20% of the world's oil and gas shipments, the drop in transit through the Strait of Hormuz has also curtailed a massive share of fertilizer flows. Middle Eastern producers accounted for about 29% of global urea exports in 2025, according to S&P Global Energy analysts.

So, after briefly reducing production early in the conflict, SKW boosted output as the cross-commodity squeeze persisted, Cingr explained.

Indeed, rather than accelerate the decline in industrial activity that has swept Europe in recent years, the SKW CEO expects the supply shocks and price surges springing from the conflict in the Persian Gulf will have the opposite effect.

"European politicians will see -- or they are seeing -- how important it is to keep industry available in the European region," he said. "Hormuz showed the politicians and the population how important it is to have our own production of, let's say, critical chemicals available in Europe."

ETS, methane, Russian phaseout

Cingr highlighted two EU policy interventions he would support to bolster SKW and the wider industry. First, he wants production of certain key chemicals -- including ammonia -- to be excluded from or more lightly priced under the EU's Emissions Trading System.

He also wants the EU to modify its methane emissions regulation, which is set to impose heightened requirements on gas, oil and coal importers from next year, echoing a sentiment voiced recently by other industrial players.

Cingr backs the EU's phaseout of Russian gas and LNG. While SKW initially feared the policy would spur a significant rise in gas prices, Cingr said this has not happened thanks to the EU's significant sourcing of LNG from the US, which has supplied 41% of the EU's LNG imports so far in 2026, according to S&P Global Energy CERA data.

"If US flows continue, then there is no risk," he said.

At the same time, Cingr also stressed that if Russia returns to a "stable country," the EU has reason to rekindle gas trade.

"Economically, it makes sense if such gas is again available," he said.

In the near term, if the Middle East war subsides "soon" and trade via the Strait of Hormuz fully resumes, Cingr said he expected European gas prices would stabilize around Eur30/MWh for the rest of 2026.