Shipments Rose: A Positive in CF Industries’ 3Q16 Earnings
Previously in this series, we discussed how overall sales from CF Industries (CF) fell in 3Q16. Before we look at prices, which caused the fall, let’s discuss shipments. It will help us understand the demand dynamics (MXI) for nitrogen products and whether CF Industries continues to command its market share amid other players such as PotashCorp (POT), CVR Partners (UAN), and Agrium (AGU).
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Overall, CF Industries’ shipments for its combined segments grew 14% during the quarter to 3.6 million tons from 3.2 million tons in 3Q15.
Granular urea and the AN (ammonium nitrate) segment contributed the most to CF Industries’ shipment growth during the quarter. The AN segment’s shipments grew 73% to 599,000 tons in 3Q16 from 347,000 tons in 3Q15.
Granular urea shipments grew 53% to 823,000 tons from 539,000 tons. CF Industries hasn’t held its earnings call yet. From PotashCorp’s (POT) 3Q16 earnings, we know that the boost in urea sales might have come from the capacity shutdowns in China. Read PotashCorp: 3Q16 Shows Investors Will Need to Be Patient for PotashCorp’s 3Q16 earnings analysis.
The Other nitrogen product segment’s shipments also grew during the quarter by as much as 31% to 389,000 tons from 297,000 tons in 3Q15.
In contrast to the above three segments, CF Industries’ Ammonia and UAN (urea ammonium nitrate) segments saw shipment volumes fall in 3Q16. Ammonia shipments fell 14% to 505,000 tons from 585,000 tons, while the UAN segment’s shipments fell 10% to 1,305,000 tons from 1,445,000 tons in 3Q15.
According to the company, shipments suffered due to the delay from North America and 3Q16 being slow.
Next, we’ll discuss CF Industries’ realized prices.