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Natural Gas Price Update for Nitrogen Investors

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Natural gas prices

Low natural gas prices in the US have been highly beneficial for North American fertilizer companies (XLB) including CF Industries (CF), CVR Partners (UAN), Nutrien (NTR), and Mosaic (MOS). The lower natural gas prices enable these companies to sit on the lower end of the cost curve, which is good for margins when overall fertilizer selling prices rise.

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Under $3 level

Henry Hub natural gas prices last week remained under the $3 per MMBtu (million British thermal unit) level last week. On a weekly basis, natural gas spot prices at Henry Hub declined from $2.94 per MMBtu to $2.93 per MMBtu. The U.S. EIA (Energy Information Administration) said in its weekly report from September 12 that natural gas prices declined in most of the locations.

The EIA issued its latest short-term energy outlook report on September 11. In that report, the EIA estimated that the natural gas prices in 2018 will average below the $3 per MMBtu level at $2.99 per MMBtu. However, in 2019, the EIA estimates natural gas prices to rise on average to $3.12 per MMBtu, a ~4% increase year-over-year.

Next, we’ll discuss diammonium phosphate prices.

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