Natural gas prices
Two weeks back, natural gas prices at Henry Hub in the US (XLB) saw a spike on the back of increased demand resulting from extreme weather. The extreme weather in North America drove the increased need for heating. High natural gas prices can put pressure on nitrogen fertilizer producers such as CF Industries (CF), Nutrien (NTR), Terra Nitrogen (TNH), and CVR Partners (UAN).
In the week ending January 19, natural gas prices at Henry Hub remained elevated with the prices peaking at $5.46 per MMBtu (million British thermal units) on January 16, 2018. In comparison, prices peaked at $6.24 per MMBtu two weeks ago.
In 2018, the U.S. EIA (Energy Information Administration) expects natural gas production in the US to increase to 80.4 Bcf/d (billion cubic feet per day) from 73.5 Bcf/d in 2017. Increased production should make natural gas price expectations lower. Consequently, the EIA forecasts the 2018 natural gas prices to average $2.88 per MMBtu, down from an average of $2.99 per MMBtu in 2017. In 2019, the EIA forecasts the prices to average $2.92 per MMBtu, a slight increase in the prices from 2018.
Next, we will discuss the prices of phosphate fertilizers.