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Fertilizer Market Report – February 26, 2025
CF Industries and Nutrien Q4 market outlooks
In this week’s fertilizer report: CF Industries Q4 Results Market Outlook; Nutrien Q4 Results Market Outlook; and Last Week’s North American Urea and Phosphate Price Action.
News of the Week
The CF Industries and Nutrien Q4 market outlooks support the unchanged view that strong demand and tight supply globally will likely continue to support nitrogen prices.
Both companies also believe that strong corn plantings in the US will support nitrogen demand. Add to that, US nitrogen net imports, in the first half of the 2024/2025 fertilizer year, are down 60% relative to the five-year average. The US will be fighting for tonnes in our view. Strong prices in the US will support Canadian nitrogen prices.
CF Industries Q4 Results Market Outlook
Global nitrogen pricing was supported in the fourth quarter of 2024 by positive global demand, constrained supply availability due in part to natural gas shortages in Iran and Egypt, and China’s continued restrictions on urea exports. In the near-term, management expects the global supply-demand balance to remain constructive, as inventories globally are believed to be below average and production economics for the industry’s marginal producers in Europe remain challenging.
North America: The Company currently forecasts average U.S. corn returns above soybeans, due in part to improving corn prices from strong corn exports and lower 2024 yield estimates, which is expected to be positive for corn plantings and nitrogen demand in the region. Management expects corn plantings in the United States in 2025 will be approximately 93 million acres.
Brazil: Urea imports for 2024 were 8.3 million metric tons, 14% higher than 2023. Nitrogen imports to Brazil are expected to remain strong in 2025 on forecast high corn plantings and continued nominal domestic nitrogen production.
India: Urea inventory in India is believed to be low following strong domestic demand for urea, lower-than-targeted domestic urea production and lower urea import volumes in 2024 compared to 2023. Given the inability of import agencies to secure targeted volumes in the country’s two most recent urea import tenders, another urea import tender may be necessary in the first quarter of 2025, which will compete for volumes with demand in the Northern Hemisphere for spring applications. Additionally, India is likely to tender earlier in its next fertilizer year than in recent years given the lower urea stock position.
Europe: Approximately 25% of ammonia capacity, excluding two ammonia facilities that have recently announced shutdowns, and 20% of urea capacity were reported in shutdown/curtailment in Europe as of January 2025. 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.
China: Ongoing urea export controls by the Chinese government continue to limit urea export availability from the country. China exported less than 300,000 metric tons of urea in 2024, 94% lower than 2023. Urea exports may resume following China’s domestic spring application season.
Russia: Urea exports from Russia increased by 16% through the end of the third quarter of 2024 compared to the same period in 2023 due to the start-up of new urea granulation capacity, producers favoring urea upgrades over UAN upgrades, and the willingness of certain countries to purchase Russian fertilizer, including the United States and Brazil.
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, the Company believes the global nitrogen cost structure will remain supportive of strong margin opportunities for low-cost North American producers.
Longer-term, management expects the global nitrogen supply-demand balance to tighten as global nitrogen capacity growth over the next four years is not projected to keep pace with expected global nitrogen demand growth of approximately 1.5% per year for traditional applications and new demand growth for clean energy applications. Global production is expected to remain constrained by continued challenges related to cost and availability of natural gas.
(Source: CF Industries)
CF Industries Holdings, Inc. Reports Full Year 2024 Net Earnings of $1.22 Billion, Adjusted EBITDA of $2.28 Billion
Nutrien Q4 Results Market Outlook
Agriculture and Retail Markets
Global grain stocks-to-use ratios remain historically low, and demand remains strong, providing a supportive environment for ag commodity prices in 2025. We expect US corn plantings to range between 91 and 93 million acres and soybean plantings to range from 84 to 86 million acres in 2025. The projected increase in corn acreage, combined with a shortened fall application season in 2024, supports our outlook for strong North American fertilizer demand in the first half of the year.
In Brazil, generally favorable soil moisture conditions and stronger crop prices are expected to lead to an increase in safrinha corn planted acreage of approximately five percent, supporting crop input demand in the first half of 2025.
A weaker Australian dollar and strong grain and oilseed export demand is supporting grower economics, and conditions remain positive for 2025 crop input demand.
Crop Nutrient Markets
Global potash shipments rebounded to approximately 72.5 million tonnes in 2024, driven by improved supply and supportive application economics that contributed to increased demand in key markets such as China, Brazil and Southeast Asia.
We forecast global potash shipments between 71 and 75 million tonnes in 2025. The high end of the range captures the potential for stronger underlying global consumption and the lower end captures the potential for reduced supply availability. We anticipate the potential for supply tightness with limited global capacity additions in 2025 and reported operational challenges and maintenance work in key producing regions.
Global urea and UAN prices have increased in the first quarter of 2025, driven by strengthening demand in key import markets and restricted supply, including continued Chinese urea export restrictions. Global ammonia prices have trended lower to start the year due to seasonal demand weakness and the anticipation of incremental supply in the US and export capacity from Russia. We expect North American natural gas prices to remain highly competitive compared to Europe and Asia, with Henry Hub natural gas prices projected to average between $3.25 and $3.50 per MMBtu for the year.
The US nitrogen supply and demand balance is expected to be tight ahead of the spring application season, as nitrogen fertilizer net imports in the first half of the 2024/2025 fertilizer year were down approximately 60 percent compared to the five-year average. Additionally, nitrogen demand for the spring season is expected to be strong due to the limited fall ammonia application season and higher projected corn acreage.
Phosphate fertilizer markets remain firm, particularly in North America where inventories were estimated to be historically low entering 2025. We expect Chinese phosphate exports similar to 2024 levels, with total DAP/MAP exports ranging between 6 and 7 million tonnes, and tight stocks in India to support demand ahead of their key planting season.
(Source: Nutrien)
Nutrien Reports Fourth Quarter and Full-Year 2024 Results
North America Urea Last Week
According to Green Markets, last week, urea delivered prices in Western Canada were flat WoW in a range of C$800-$830/mt for the third week in a row.
Urea NOLA prices ended last week down 5.0% WoW, after rising 5.6%% the previous week. Urea NOLA ended last week in a widened range of US$380-$412/st, from a range of US$411-$423/st, the previous week.
Direct Hedge framed up the urea NOLA market at the beginning of this week as follows: February was bid US$400 and offered $410/st. March was bid/offer US$410/$420/st. April was bid/offer US$400/$410/st. May was bid/offer US$360/$380/st.
North America Phosphate Last Week
According to Green Markets, the delivered Western Canada MAP price range was flat WoW in a range of C$1,120-$1,140/mt for the third week in a row. MAP inventory is still reportedly quite tight in North America.
MAP NOLA prices were down 1% WoW to US$595/st from US$600-$605/st the previous week.
Industry Tidbits
