November 18, 2019 / 9:34 AM / a month ago

Chinese fertiliser maker halts production due to natural gas crunch

BEIJING, Nov 18 (Reuters) - A Chinese fertiliser firm, Hubei Yihua Chemical Industry Co, halted production at a plant in northern China because of insufficient natural gas supply, the company said in a statement filed to the Shenzhen stock exchange on Monday.

Inner Mongolia Erdos Union Chemical, jointly set up by Yihua, Chinese cashmere maker Erdos Group, and Sigma investment Group from the United States, will shut its 520,000-tonnes-per-year (tpy) synthesis ammonia and 1.04-million-tpy urea units from Nov. 18, the filing said.

Hubei Yihua holds a 51% share of Erdos Union Chemical.

Fertiliser producers, a major industrial user of natural gas in China, typically face energy shortages during the winter heating season that starts in November because the government prioritises gas supply to residential users.

Last week, China’s state planner said it expects this winter’s energy supply and demand to be generally balanced amid increasing natural gas output and liquefied natural gas imports

Hubei Yihua warned of a potential 15 million yuan ($2.14 million) profit loss if production at Erdos cannot resume by the end of the year.

$1 = 6.9941 Chinese yuan renminbi Reporting by Muyu Xu and Dominique Patton; Editing by Christian Schmollinger

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