Natural gas is the main energy source for European fertilizer plants to produce nitrogen fertilizer, and after the Nord Stream pipeline leak, the price of natural gas supply was tightened and fluctuated. Due to the rising costs, major European fertilizer plants cut production or shut down production, further leading to higher fertilizer prices in Europe.

    At present, the Russian-Ukrainian geopolitical conflict is still ongoing, the EU and Russia around the energy sector sanctions and counter-sanctions means intertwined, energy conflicts are increasingly intensified, combined with the damage to the Nord Stream pipeline to further increase the uncertainty of the international energy market. This uncertainty has been reflected in the jump in European gas prices this week.

    Typically, one ton of nitrogen fertilizer requires 1.5 tons of coal or 615 cubic meters of natural gas. Coal or natural gas is first converted to ammonia, which is then synthesized into urea, the main species of nitrogen fertilizer, and the shortage of natural gas has stuck right at the neck of nitrogen fertilizer production.

    Since July, 10 fertilizer plants in Europe have closed or cut production, which research firm CRU Group analyst Chris Lawson said means about 38 percent of Europe's capacity for the key fertilizer feedstock is now cut or cut altogether. And, recently, fertilizer makers YaraInternational, K+S AG, Borealis AG and Fertiglobe Plc all warned that further restrictions on fertilizer production in Europe will follow.

    In order to meet the required amount of fertilizer, European farmers are importing more to fill the gap, which is currently a low cost and convenient option. New Power Fertilizer exports 50,000 tons of ammonium sulfate nitrogen fertilizer to provide farmers with a long-term stable supply.