US fertiliser manufacturer CF Industries, which owns the UK’s two ammonium nitrate factories, saw record sales volumes in the first six months of 2020, largely due to the good weather for US crop plantings this year.
CF reported an EBITA of $786 million on sales of $2.2 billion for the six months ended June 30th 2020, compared to $973m and $2.5bn in the H1 2019. It sold 10.70 million tonnes of product in the period from 9.80m tonnes in the prior first half. Lower average selling prices over the period only partially offset the higher volumes.
Looking ahead, CF expects the global nitrogen demand outlook to remain positive into 2021. It says a large US corn harvest this autumn, plus strong import demand for corn from China will help support US farm incomes in 2020. This will encourage a rise in plantings for harvest 2021, and in turn more demand for crop inputs such as fertiliser.
Elsewhere in the world, there is growing demand for nitrogen fertiliser products from India and Brazil.
CF says that low global energy prices have helped its cot control, but low global nitrogen prices have also made some of its production uneconomic – three ammonia plants in Trinidad have been shut.
Over the next four years, CF expects global demand growth for nitrogen to outpace net capacity additions with a limited number of facilities currently under construction around the world. It adds that the Covid-19 pandemic will only add to delays in completing and starting-up new capacity.
“The first half of 2020 demonstrated the resilience of our business model and outstanding performance by the CF team in a difficult and uncertain environment,” said CF president and chief executive officer Tony Will. “We maintained our focus on protecting the health and well-being of our employees, operated safely and met strong customer demand, helping us achieve record first half sales volumes.”