CF Industries said global nitrogen pricing supported by many factors including natgas shortages

HOUSTON (ICIS)–CF Industries said in its latest nitrogen fertilizer market outlook global pricing was supported in the third quarter of 2024 by strong global demand, lower supply availability due to natural gas shortages, China’s absence in urea exports and planned maintenance activities in the Middle East.

The US fertilizer producer said that in the near-term their management expects the global supply-demand balance to remain constructive, as inventories globally are believed to be below average and energy spreads continue to be significant between North America and high-cost production in Europe.

CF said for North America that while grains prices are under pressure from expected high crop production it is their belief that the fall ammonia application season for the US and Canada will be positive if weather is favorable.

US crop returns for 2025 are forecast at similar levels to 2024, which is expected to support stable planted corn acres year on year.

The producer said over the medium-term, significant energy cost differentials between North American producers and high-cost producers in Europe and Asia are expected to persist.

As a result, CF believes the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers.

Looking at Brazil the producer said through September 2024 that urea imports to the country were 5.4 million tonnes, 13% higher than through the same period in 2023.

CF said Brazil is expected to import 2.0-2.5 million tonnes of urea in the fourth quarter due to forecast higher planted corn acres and nominal domestic production.

For India the company feels there is significant urea import requirements remaining through March 2025 due to favorable weather for rice, wheat and other crop production as well as lower-than-targeted domestic urea production driving greater import need.

Regarding Europe CF said there is approximately 20% of ammonia and urea capacity which was reported in shutdown or curtailment modes as of September 2024.

The company said management believes that ammonia operating rates and overall domestic nitrogen product output in Europe will remain below historical averages over the long-term given the region’s status as the global marginal producer.

For China the producer noted that the ongoing urea export controls by the government continues to limit urea export availability from the country. Through September 2024, China has exported 254,000 tonnes of urea, 91% lower than the same period in 2023.

In Russia the company said the urea exports have increased by 5% this year due to the start-up of new urea granulation capacity and the willingness of certain countries to purchase Russian fertilizer, including Brazil and the US.

Exports of ammonia are expected to rise with the completion of the country’s Taman port ammonia terminal though CF noted that annual ammonia export volumes are projected to remain below pre-war levels.

Looking at the longer-term view of nitrogen the producer is expecting the global supply-demand balance to tighten as global capacity growth over the next four years is not projected to keep pace with expected global lift in demand of approximately 1.5% per year.

As far as global production CF said it is expected to remain constrained by continued challenges related to cost and availability of natural gas.