In our recent series Where Does the Fertilizer Industry Go from Here? we saw the outlook for fertilizer prices provided by CF Industries (CF), Mosaic (MOS), and Nutrien (NTR) in their second-quarter earnings releases. We saw how fertilizer prices have been a key driver of these companies’ better-than-expected results.
Nitrogen fertilizers, especially urea, have seen an upward momentum in price due to supply tightening in China and the European Union. As a result, large producers such as CF Industries have benefited since increased prices led to higher price realizations and margins. In the above chart, you can see that urea prices recently had a small pullback but have resumed their upward momentum.
To put it in perspective, in the week ended August 10, urea prices in the NOLA (New Orleans) region of the United States rose 1.2% to $231 per metric ton, from $229 per metric ton in the week ended August 3. On the other hand, urea prices in Brazil saw sideways momentum at $292 per metric ton last week. Prices in Brazil aren’t far from the peaks observed through January 2016, as shown in the above chart.
Year-over-year, urea prices in both regions remained strong. In NOLA, urea prices (XLB) rose 30%. In Brazil, they were up 32%.
Next, we’ll take a look at natural gas prices.