Category: Commentary

CEO commentary, Q1 2015. Discuss: Will the US be a nitrogen exporter?

If you want to know whether - or when - the US will become a nitrogen exporter, read what the fertilizer company CEOs say during the latest round of quarterly earnings calls.

These guys should have formed pretty solid opinions by now about how the capacity expansions will affect long-term supply and demand, and how they're going to gain/keep market share and competitive advantage. But it can be a challenge to infer what those opinions might be.

I've summarized the pertinent parts of the debate here, with quotes from Agrium, CF Industries, KBR, LSB Industries, OCI, Potash Corp, and Yara.

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Chuck Magro on Borger and Kenai

"The key question with Kenai is, is there enough gas to restart the plant ... If we were able to bring that plant up, that will be by far the best capacity expansion we've ever done."

Chuck Magro, Agrium's new CEO, talked about the potential expansion at Borger, Texas, and restart at Kenai, Alaska, during the discussion that followed his presentation at CIBC's 17th Annual Whistler Institutional Investor Conference on Wednesday, January 22nd ...

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CF Industries presentation — Citigroup Basic Materials Symposium

Today, the CFO of CF Industries, Dennis Kelleher, presents some interesting tidbits about their Port Neal and Donaldsonville brownfield ammonia plants.

On page 13, Kelleher lays out the arguments that best explain why I judge some projects to be "unlikely": CF has first mover advantages, cheap debt, and (with the new Mosaic agreement) low risk on future cash flows ...

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CF Industries investor day

Douglas Hoadley (Director of Agribusiness Analysis) at the CF Industries Investor Day:

I know there's been a lot of projects announced, whether North America or around the world. I think you have to take those all with a grain of salt. We've done some analysis and IFA has done some analysis. When you look about it, it's only 50% to 60% of the plants that are announced actually get built ...

And when you look at that, you'll find that North America, or the US, will still remain importers of nitrogen fertilizers ...

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Potash shareholder Q&A

Wayne Brownlee, EVP and CFO of Potash, during a Q&A with shareholders on 6/10/13:

So it's very competitive, very healthy. We may well see a situation where excess capacity comes on in the United States. And we may see some more challenging times on ammonia prices than we've seen ...

The nice thing about United States is that there is a lot of room to displace the imports ...

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