Fertiliser manufacturer CF Industries has reported reduced profitability and revenues on similar product volumes from trading in the first six months of the year, as markets continue to normalise after the 2022/23 energy price disruption.
The US multinational made an EBITDA of $752 million on revenues of $1.57 billion in the three months ended June 30th 2024, compared to $855m and $1.77bn in Q2 2023. Product deliveries were 4.87 million tonnes (4.93m tonnes) and gas feedstock costs fell to $1.9MMBtu ($2.74MMBtu).
At the half year stage, EBITDA was $1.24bn on sales of $3.04bn, from $1.78bn and $3.79bn a year earlier. Product volume was 9.4m tonnes (9.47m tonnes) and gas cost an average $2.3MMBtu ($3.86MMBtu).
Commenting on the nitrogen market outlook, CF says gas curtailments in Egypt and Trinidad, along with scheduled outages and a lack of substantial urea export availability from China, have supported global nitrogen pricing as Q2 moves into Q3. This period of the year usually sees lower prices and low global shipments as demand shifts from the Northern Hemisphere to the Southern Hemisphere.
In the near-term, the company expects the global supply-demand balance to remain constructive, led by nitrogen import requirements through the year-end for Brazil and India and a continued wide energy spread between North America and high-cost production in Europe.
CF notes that some 25% of ammonia and 30% of urea capacity in Europe was either shut down or curtailed in early July 2024. It 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. This points to higher nitrogen imports of ammonia and upgraded products into Europe than the historical average.
The company continues to evaluate low-carbon ammonia technologies and the development of global low-carbon demand. It is exploring with partners autothermal reforming (ATR) ammonia production technology and the cost and viability of adding flue gas carbon dioxide capture to a steam methane reforming (SMR) ammonia facility. Results are expected by the end of the year.
It is investing a 20-megawatt alkaline water electrolysis plant to make green ammonia at its Donaldsonville Complex in the US, as well as carbon capture and sequestration projects at the same facility and at the Yazoo City site in Mississippi.