Europe’s high natural gas prices are pushing energy-intensive industries across the continent to secure supplies of liquefied natural gas (LNG) to store for next winter, Norwegian fertilizer maker Yara said.
The cost of gas, a key ingredient in making plant nutrition, spiked in the first quarter, contributing to weaker earnings for the Norwegian firm, which missed analysts’ earnings forecasts.
“There has been less LNG available for Europe than we would have hoped from a gas market standpoint,” Yara’s head of market intelligence, Dag Tore Mo, told analysts and reporters.
“Higher coal prices globally have also increased the trigger point between the gas and coal switching in Europe. And also, CO2 costs have gone up.”
Europe saw unseasonably cold weather lasting well into March, resulting in a greater need for heating.
“Going forward, Europe is ending the winter with very low stocks. There is now a competition for buying gas for direct usage and for storage for next winter,” Mo said.
“That’s what keeps the forward curve fairly flat at around current levels over the summer.”
Chinese and South Korean demand for LNG had also helped push up prices, he added.