Terra Nitrogen Co LP

The world has a problem that’s actually good for the fertilizer industry. This is the world’s population, which is ever-growing, as is food consumption.

CF Industries emerged as the biggest gainer last week and rose as much as 1.0% to $37.7. Most fertilizer stocks continue to deliver losses YTD.

On average, urea prices in the Middle East fell as much as 4% week-over-week to $237 per metric ton from $247 per metric ton a week ago.

Fertilizer affordability tracks how the prices of key NPK fertilizers moved in comparison with the key fertilizer-consuming crops such as corn, soybean, and wheat.

In the recent quarters, fertilizer companies (MOO) have rationalized their output and costs to sustain the downward momentum in fertilizer prices that seemed to keep going down.

For years, nitrogen prices have been trending lower, but in 4Q17, ammonia, urea, and UAN (urea ammonium nitrate) realized prices finally improved.

In 4Q17, the overall nitrogen shipments of the five companies discussed below moved lower year-over-year.

With the 4Q17 earnings season behind us, it’s time to take a closer look at how fertilizer companies (MOO) performed in the recent quarter.

Urea prices for the standard grade in the NOLA (New Orleans) region of the US and in Egypt saw the steepest weekly change last week.

Last week, the Fertilizer Affordability Index was unchanged week-over-week at 0.7x.

Last week, urea price movements were broadly positive with prices in the Middle East experiencing strong gains week-over-week.

CVR Partners (UAN) emerged as the top gainer among fertilizer stocks with a 6.7% rise last week to close at $3.18 per share.

CF’s Ammonia segment’s gross margin per ton expanded from $1.00 per metric ton to $36.00 per metric ton.

During 4Q17, CF Industries’ Ammonia segment grew 58.0% year-over-year to 1.2 million metric tons.

Last week, the fertilizer affordability showed some positive momentum week-over-week.

Lately, natural gas prices have experienced high volatility primarily due to the swing in weather in North America.

SMG said it intends to pass on the benefits from tax savings to its employees by increasing salaries and through other programs.

Fertilizer affordability has seen some tightening in the last couple of months.

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.

Nitrogen fertilizer prices remained volatile on the back of the volatility in the input prices of natural gas.

In the week ending January 19, the VanEck Vectors Agribusiness ETF (MOO) rose 1%, and the broader market S&P 500 (SPY) also ended in positive territory with a gain of 1.2%.

Natural gas is one of the critical input materials needed for nitrogen and some phosphate-based fertilizers.

Urea is sold in the granular and prilled variety. In the week ending January 12, granular urea prices were broadly flat to positive week-over-week.

Recently, the Fertilizer Affordability Index has seen an upward trend.

For the week ending January 5, 2018, DAP (diammonium phosphate) global prices at most locations were flat to positive with the exception of Saudi Arabia.

Natural gas is one of the key input components for gas-based nitrogen fertilizer producers (MOO)(MXI) such as CF Industries (CF), Terra Nitrogen (TNH), CVR Partners (UAN), and Nutrien (NTR).

In the week ending January 5, the prices for granular as well as prilled urea were broadly higher week-over-week.

In the earlier parts of this series, we saw how CF Industries (CF) sales performed as a result of movements in fertilizer prices and shipment volumes.

In the earlier part of this series, we discussed how shipments impacted CF Industries’ (CF) sales. From our analysis, it’s clear that a rise in selling prices remains the most important growth catalyst for the company.

Nitrogen in 2018 Nitrogen prices remained weak for most of 2017, falling as much as 27% YoY (year-over-year). Ammonia, a fundamental nitrogen input, is further upgraded to nitrogen fertilizers such as urea and urea ammonium nitrate. Ammonia supply As shown in the above chart, ammonia capacity saw a net addition of five million metric tons, or […]

For the week of December 6–13, 2017, natural gas spot prices at Henry Hub were broadly lower, according to the EIA.

According to the EIA (U.S Energy Information Administration), natural gas prices were broadly mixed from November 29 to December 6, 2017.

CVR Partners (UAN) emerged as the top gainer last week, rising 17.4% week-over-week to close at $3.70. CF Industries (CF) followed, rising 4.4% to close at $39.30.

Since the Senate approval of the tax bill, the S&P 500 Index (SPY) is up by 48 basis points, and the VanEck Vectors Agribusiness ETF (MOO) is up by 74 basis points.

Henry Hub (MOO) natural gas prices saw a negative week-over-week trend, a continuation of the trend from the previous week.

When we talk about nitrogen, China gets the most attention because of its large exports that have put downward pressure on prices in recent years.

Last week, the average weekly natural gas prices were broadly lower week-over-week at the Henry Hub in the US (MOO).

Last week, Intrepid Potash (IPI) emerged as the top gainer in the industry with its stock closing 5.6% higher at $3.78.

The average weekly natural gas prices at Henry Hub for the week ending November 17 moved higher week-over-week.

Last week, urea prices at the Yuzhny location fell as much as 4.1% week-over-week to $256 per metric ton from $267 per metric ton a week ago.

In the week ending November 17, most of the agricultural fertilizer stocks ended in negative territory. Intrepid Potash emerged as the biggest loser.

CF Industries (CF) saw the steepest growth in nitrogen shipments in 3Q17. Shipments rose 33% YoY to 4.4 million metric tons.

EV Energy Partners (EVEP), Mid-Con Energy Partners MCEP), and Legacy Reserves (LGCY) led the MLP top gainers last week ending November 3.

Last week, Henry Hub natural gas prices saw a week-over-week improvement.

In the week ending November 3, agricultural fertilizer stocks were broadly positive.

In the previous part of this series, we saw that the 3Q17 shipments for CF Industries (CF) saw meaningful growth year-over-year.

In 3Q17, CF Industries (CF) sales saw growth across each of its five segments year-over-year. Overall, the company’s sales grew 28% year-over-year to $870 million from $680 million in 3Q16.

CF Industries (CF) has managed to deliver a strong performance over the last month, rising 12.5% as of October 16, 2017.

The natural gas prices at Henry Hub in the US fell 4.1% week-over-week from a weekly average of $2.96 per MMBtu to a weekly average of $2.84 per MMBtu.

On average, granular urea prices were flat to positive week-over-week. In NOLA (New Orleans), granular urea prices rose as much as 3.5% week-over-week.

Nitrogen prices have been subdued for most of this year—compared to a few years ago. The global market continues to experience excess capacity.

So far this year, Henry Hub natural gas prices have hovered around $3 per MMBtu (million British thermal units).

After an impressive runup in the past four months, urea prices appear to be cooling off.

In the EIA’s recent outlook, natural gas prices are expected to average $3.29 per MMBtu in 2018—compared to an average of $3.05 per MMBtu in 2017.

In the week ending September 22, urea prices gained significant upward momentum. The gain was favorable news for nitrogen fertilizer producers.

Over the recent decade, Terra Nitrogen has risen 55.2% and underperformed the S&P 500 Index’s rise of 69.2% over the same period.

EV Energy Partners (EVEP) was the top MLP gainer last week, which ended on September 8, 2017. It rose 13.9%.

The week ending September 1 was broadly positive for the agribusiness sector. The week was positive for fertilizer stocks.

Teekay Offshore Partners (TOO) was the top MLP loser last week, which ended September 1, 2017. It fell 6.3%.

The higher supply of nitrogen fertilizer was the key reason that producers experienced lower selling prices YoY.

MAP prices reached a peak of $400 per metric ton earlier this year, but they’ve been on a downward trajectory ever since.

Last week, natural gas prices at Henry Hub saw a positive momentum week-over-week. They rose as much as 3.2% to a weekly average of $2.95 per MMBtu.

Last week, which ended August 25, 2017, the price of urea paused on its upward momentum.

Calendar 2Q17 remained subdued for the nitrogen fertilizer pricing environment. Cheap energy costs have driven capacity buildups and flattened the cost curve.

During 2Q17, CF Industries (CF) saw its gross margins fall in each of its segments except the AN (ammonium nitrate) segment.

While CF Industries’ (CF) shipments rose in 2Q17, price realizations continued to disappoint.

CF Industries (CF) reported EPS (earnings per share) of $0.10 in 2Q17, which was in line with analysts’ consensus estimate of $0.01 per share.

CF Industries (CF) is expected to see a significant reduction in its capital expenditure (or capex) year-over-year (or YoY) in 2Q17 and for the next four quarters.

Last week, granular urea prices moved higher, which helped bring some relief to urea producers. But the falling global ammonia prices remained a challenge.

CF Industries (CF) is the largest producer of nitrogen fertilizer in North America. The company also has a controlling stake in Terra Nitrogen (TNH).

Last week, granular urea price momentum was broadly mixed on a week-over-week basis, while prilled urea prices failed to show any momentum.

For the week ended July 7, the agribusiness sector performed broadly in the negative territory.

China is the largest consumer of nitrogen fertilizers, but it produces most of it within its borders. Urea is Chinese farmers’ top choice.

Week-over-week, natural gas prices at the Henry Hub in the United States were broadly negative for the week ended June 30, 2017.

Realized prices for fertilizer companies are the main culprit for the dismal performances among companies in the agricultural fertilizer sector.

CF Industries (CF) is gaining momentum in terms of capacity additions and lowering its production costs. Is the worst over for the company?

For each of the past two years, there have been net urea capacity additions of ~22 million metric tons. During the same period, ~14 million metric tons of capacity were shut down.

Urea prices have fallen YTD (year-to-date) as of June 23, 2017. They’re now trading even lower than the levels they saw in the corresponding week in 2016.

Fertilizer prices are one of the key determinants of the survival of fertilizer companies such as CF Industries (CF), PotashCorp (POT), Intrepid Potash (IPI), and Terra Nitrogen (TNH).

The demand for nitrogen fertilizers (XLB) remains robust, as we can see in the latest earnings releases of CF Industries, PotashCorp (POT), Agrium (AGU), and Terra Nitrogen (TNH).

Not only did CF Industries’ earnings fall year-over-year (or YoY) in 1Q17, its margins were also significantly lower YoY. To understand why, let’s dig deeper into the cost curve.

In this article, we’ll discuss the outlook for the capacity additions of ammonia, the fundamental nitrogen fertilizer, in the near term.

In this article, we’ll explore the impact of the second key driver of CF Industries’ sales: shipments.

CF Industries (CF) reports its sales in five segments: UAN (urea ammonium nitrate), Granular Urea, Ammonia, AN (ammonium nitrate), and Other Nitrogen Products.

CF Industries (CF) closed at $27.3 per share on June 9, which was 13.4% lower than its levels at the beginning of this year.

Last week, natural gas prices at Henry Hub fell by an average of 3.1% week-over-week to $3 per MMBtu from $3.2 MMBtu a week ago.

In recent quarters, nitrogen fertilizer prices have been lower YoY including in 1Q17. Overall nitrogen prices continue to impact producers’ profitabilities.

Terra Nitrogen (TNH) saw the highest growth in shipments. Its shipments rose 45% YoY to 598 thousand metric tons from 411 thousand tons a year ago.

While lower natural gas prices on the back of abundant availability provide positive direction for these companies, pressures from China remain an issue.

Last week was broadly negative for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) fell 53 basis points, and SPY rose 42 basis points.

Prices continue to remain under pressure as a result of excess supply in the market.

During 1Q17, Agrium experienced a slight expansion in gross margins from 20% in 1Q16 to 21% in 1Q17.

For the week ending April 28, the Fertilizer Affordability Index fell slightly to 0.58x—compared to 0.59x the previous week.

The week ending April 28, 2017, was broadly positive for agricultural fertilizer stocks. The VanEck Vectors Agribusiness ETF (MOO) rose by 126 basis points.

Analysts estimate CF Industries’ EBITDA to reach $302 million, which could grow slightly from $300 million in 1Q16.

CF Industries earns most of its sales—about one-third—from its UAN segment, followed by its Ammonia and Granular Urea segments.

PotashCorp’s Nitrogen segment sales fell ~11% YoY to $365 million, as compared to $412 million in 1Q16.

Natural gas prices trended lower week-over-week for the week ending April 24. Summer months are usually less demanding for natural gas.

Last week, as reported by the EIA, natural gas prices at Henry Hub rose 1.3% week-over-week to $3.03 per MMBtu (million British thermal units).

Urea prices in the US Gulf NOLA rose 4.8% week-over-week to $197 per short ton. Prices in the Middle East rose 3.1% week-over-week to $200 per metric ton.