CF Industries Sees Nitrogen Fundamentals Improving -- Commodity Comment
31 October 2019 - 10:31AM
Dow Jones News
By Josh Beckerman
Fertilizer and chemical company CF Industries Holdings Inc. (CF)
said third-quarter sales were $1.038 billion, compared with $1.04
billion a year earlier, as earnings per share rose to 29 cents from
13 cents. The company expects nitrogen industry fundamentals will
continue to improve "as the global market continues to tighten over
the coming years."
On pricing in 2019:
"Average selling prices for the first nine months of 2019 were
higher year-over-year across all major products due to a tighter
global nitrogen supply and demand balance than the prior year
period and logistical issues in North America that limited supply
at some inland locations. Average selling prices for the third
quarter of 2019 were similarly higher for urea, urea ammonium
nitrate (UAN) and ammonium nitrate (AN), and were lower for ammonia
due to greater global supply availability."
On its market overview:
"In the near-term, demand from import-dependent regions should
support global pricing. In North America, corn crop futures
continue to support an increase in planted corn acres over the next
two seasons. Outside of North America, demand for urea from India
and Brazil remains positive. Through September 2019, India has
imported 5.9 million metric tons of urea, a 36 percent increase
over the same period in 2018. India is expected to issue 1-2 more
tenders through March 2020. Imports of urea to Brazil through
September 2019 were 3.5 million metric tons, up approximately three
percent year-over-year."
"The company expects that global demand growth for nitrogen over
the next four years will outpace net capacity additions given the
limited number of facilities currently under construction around
the world, none of which are in North America. The company also
expects Chinese coal-based nitrogen complexes to remain the global
marginal urea producer and thus set the global price floor. Net
Chinese-produced urea exports are likely to be in a range of 1-3
million metric tons annually, with higher nitrogen prices bidding
in additional Chinese export tons at times when urea supply is
needed worldwide."
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
October 30, 2019 19:16 ET (23:16 GMT)
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