CF Industries Holdings Inc

The gross margin rate for Mosaic’s Phosphate segment fell significantly in 2Q16, to 10% from 21% in 2Q15.

Fertilizer prices are one of the key drivers for fertilizer stocks. So investors and analysts watch fertilizer prices closely.

In 2014, the cost of production for DAP per ton ranged from $190 to $450 per metric ton, as we can see in the chart.

The petroleum (or pet) coke index remained unchanged from the previous week during the week ending July 22, 2016.

In June 2016, the global soybean stock-to-use ratio stood at 20.2%, which was at its lowest point compared to the past four years.

Investors in the fertilizer industry (XLB) must actively track the relationship between crop prices and fertilizer prices. This, in turn, impacts agricultural chemical companies.

The fertilizer industry moves in cycles and with most companies experiencing a decline in margins, the industry seems to be in the bottom cycle.

Last week, nitrogen producers CF Industries (CF), CVR Partners (UAN), Terra Nitrogen (TNH), and PotashCorp (POT) ended in the red.

As most global ammonia production is upgrading to urea, ammonia prices may affect urea prices.

Natural gas is the key raw material for the production of nitrogen fertilizers such as ammonia and urea.

Ammonia prices for Tampa CFR (cost and freight) moved down 1.6% to $315 per metric ton compared to $320 per metric ton in the previous week.

In the international market, ammonia at the Black Sea, Ukraine, inched up to $275 per metric ton FOB, a rise of 1.9% from the previous week.

Mosaic purchases certain raw materials at fixed costs to be consumed over time, but the selling prices of its finished goods can fluctuate rapidly.

Ammonia was trading at $310 per metric ton as of the week ending March 4, 2016. It fell $1 from the previous week ending February 26, 2016.

Fertilizer prices have fallen significantly over the years. But more recently, prices are showing a trend reversal for urea, UAN, and phosphate fertilizer.

As of February 19, CF Industries pays a quarterly dividend of $0.3 per share. In 2015, it paid an annual dividend per share of $3.6—down from $5 in 2014.

Coal, or petroleum coke, is widely used by nitrogen fertilizers producers in China. Declining coal prices negatively impact natural gas-based producers.

As of January 19, 2016, the VanEck Vectors Agribusiness ETF (MOO) returned -12.7% in 2015. YTD as of January 19, the ETF is down by 8%.

Unlike other companies, CVR Partners (UAN) uses petroleum coke, or pet coke, to produce nitrogen fertilizers.

CF Industries’ cash flow to capital expenditure ratio has been falling. CF Industries’ cash flow to capital expenditure ratio stands at 0.75 as of 3Q15.

Third Point started a new 2.83% position in gas pipeline operator Williams Companies, Inc.

The United States is the biggest user of corn, consuming 265 million mt (metric tonnes) of corn in 2012—equivalent to 26% of global consumption.

In this series, we’ll cover how costs in the United States, China, and Europe influence nitrogenous fertilizer prices along with other factors.