CVR Partners LP

In 2013, about 54% of global ammonia was upgraded to urea, according to FERTECON. But urea prices have rebounded from their lows at the beginning of 2016.

Granular urea prices in the Middle East declined 5% to $200 per metric ton in the week ended July 1. It was $210 per metric ton in the previous week.

For the week ending October 28, the overall movement in urea prices was flat to positive. Granular urea prices rose 6.6% to $211 per metric ton in China.

March soybean futures contracts were trading near the support level of $8.70 per bushel on February 23. Prices fell for the second consecutive trading day.

According to CF Industries, nitrogen prices could remain under pressure as new capacities come online in 2017. However, the company believes that things should improve in 2018.

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.

According to the Fertilizer Affordability Index, 2017 has been one of the most affordable years for fertilizers. Mosaic issues the index.

The Fertilizer Affordability Index has shown a downward trend since the beginning of the year. Fertilizers have become more affordable in 2017.

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

CVR Partners missed both top-line and bottom-line estimates for the second quarter, and the stock fell 4.5% after the earnings release.

There’s a handful of big players in the agricultural fertilizer industry. Setting up business requires huge capital, which makes for a high barrier to entry.

Plains All American Pipeline (PAA) was the biggest MLP loser last week, which ended on January 19, 2018. The partnership ended the week 6.1% lower.

In this series, we’ll look at key NPK (nitrogen, phosphorous, and potassium) fertilizer prices last week.

This series covers key trends that are currently affecting coal and natural gas prices and, consequently, nitrogen fertilizer producers as well.

Nitrogen is an important nutrient for crop development and growth. It’s also the most important input that allows farmers to feed billions of people in the world.

Mosaic is expected to report EPS of $0.28 in 1Q18, which would be a significant rise from its EPS of $0.04 in 1Q17.

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.

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

Nineteen Wall Street analysts are covering CF Industries. They have a consensus mean rating of 2.7 on the stock with an overall “hold” recommendation as of January 10, 2018.

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 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.

CVR Partners (UAN), the MLP mainly involved in the production of nitrogen fertilizers, was the top MLP gainer last week. CVR Partners rose 7.7%.

Last week continued to be a positive week for urea prices. Prices have risen lately as a result of excess capacities cooling off.

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

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 4Q16, the average price of ammonia for the five producers in our chart fell by an average of 38%.

Fertilizers are commonly labeled using a convention that includes the amount of NPK available in the mix.

Anthracite coal is used to produce nitrogen fertilizers. For the week ending November 18, average weekly anthracite coal prices in China rose 3.8%.

Producers in China primarily use coal as an input material to produce nitrogen, especially urea-based fertilizers. China is the world’s biggest urea exporter.

Chinese producers primarily use coal to produce nitrogen, especially urea-based fertilizers, while producers in North America mostly rely on natural gas.

The current levels of ammonia prices at several locations are below their comparative levels last year.

Producers in China mainly use coal as an input material to produce nitrogen fertilizers, especially urea. China is impacted by price movements in coal.

For the week ending September 9, average weekly anthracite coal prices in China fell 4.2% to $81.1 per metric ton—compared to the previous week.

While most North American producers use natural gas to produce nitrogen fertilizers, CVR Partners (UAN) mainly uses pet coke as a hydrogen source.

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

Ammonia prices in the Southern Plains had the steepest fall of 10.5% last week, continuing the previous week’s trend.

To date, the median valuation of fertilizer stocks is around 7.9x. That’s at the midpoint of the nine-year average of 8.2x.

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.

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.

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

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