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Fertilizer Stocks Were Broadly Negative: Week Ending March 17

PART:
1 2 3 4 5 6 7
Part 3
Fertilizer Stocks Were Broadly Negative: Week Ending March 17 PART 3 OF 7

Nitrogen Fertilizers: Natural Gas Prices Rose Last Week

Natural gas for fertilizers

In this part of the series, we’ll look at weekly price movements for natural gas in the US (SOIL) at Henry Hub. In the United Kingdom, heavy natural gas trading takes place at the NBP (National Balancing Point).

Natural gas is key to nitrogen fertilizers. It can account for as much as two-thirds of the total production costs for natural gas–based nitrogen fertilizer producers such as CF Industrial Holdings (CF), Terra Nitrogen (TNH), PotashCorp (POT), and Agrium (AGU).

Nitrogen Fertilizers: Natural Gas Prices Rose Last Week

Nitrogen Fertilizers: Natural Gas Prices Rose Last Week

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Natural gas prices

Based on data provided by the EIA (U.S. Energy Information Administration) last week, average weekly natural gas prices at Henry Hub rose by an average of 9% to $2.75 per MMBtu (million British thermal units)—compared to $2.52 per MMBtu the previous week.

Similarly, front-month futures, expiring in April 2017, rose 5% to $2.95 per MMBtu from $2.8 per MMBtu the previous week.

EIA’s forecast

In its Short-Term Energy Outlook report for March, the EIA estimated an average price of $3.03 per MMBtu in 2017 at Henry Hub. For 2018, it expects an average price of $3.45 per MMBtu. In 2016, the average natural gas price was $2.51 per MMBtu, while the average price was $2.63 per MMBtu in 2015.

In the next few parts of this series, we’ll look at the prices of phosphate fertilizers such as diammonium phosphate and monoammonium phosphate.

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