Crop Price & Ex-US Fertilizer Input Cost Strength Favors US Ammonia Producer Returns & Its Clean Transition

Key Findings

General Thoughts: Crop price strength and rising Ex-US natural gas prices relative to the US since mid-May paints an improved picture of US ammonia producer fundamentals, also benefiting clean domestic production initiatives.
Supply Chain/Commodities: We discuss recent chemical production cost shifts in the US and Europe, relating to relative economics and continued headwinds facing European industry, which remain positive for US exporters.
Energy/Upstream: European and Asian natural gas prices increased last week at a pace that outpaced US price strength, and Brent crude oil prices stepped lower WoW. We also highlight US refinery margin movements YTD.
Sustainability/Energy Transition: We focus our exhibits on US (and global) biofuel and bio-product markets, given the recent rebound in crop prices, which could hinder expansion plans if downstream prices fail to keep pace.
Downstream/Other Chemicals: NOAA issues its highest-ever early US hurricane season forecast for 2024, which lifts the risk for tighter chemical markets due to production impacts and looser crop markets due to export issues.