Ammonia Long-Term Demand Prospects Are High, But Not at Any Cost! Sentiment Towards Blue Is Rising Relative to Green

Companies Mentioned: Fertiglobe, ADNOC, ExxonMobil, CF Industries, Yara International, LSB Industries, Nutrien, Koch Fertilizer, Bayer, American Vanguard, Corteva, Johnson Matthey, Honeywell, QatarEnergy, Chevron, Nufarm, Yara International, Shell, TotalEnergies
Commodities Mentioned: Ammonia, Urea, Carbon, Hydrogen, Shipping Fuels, Fertilizer, Liquified Natural Gas (LNG), Fuel, Hydrogen, Ethanol, Biofuel, Soybean, Corn, Wheat, Crops

Key Findings

General Thoughts: There are many reasons to be positive on ammonia, as a hydrogen carrier and as a fertilizer, and its global energy transition role, but cost position is the primary factor driving returns and project approvals.
Supply Chain/Commodities: We discuss Fertiglobe 3Q results that highlight continued ammonia market tightness and their global production growth ambitions, and we highlight unsurprisingly weak Bayer crop science results.
Energy/Upstream: North American natural gas prices, across all its major markets, remain significantly cheaper than Europe and Asia natural gas, and we discuss how Trump maneuvers could boost US LNG exports into Europe.
Sustainability/Energy Transition: We discuss the major low-carbon ammonia demand channels that are poised to outpace traditional use ammonia market demand as a fertilizer, though we are generally constructive on both.
Downstream/Other Chemicals: We discuss recent movements in crop prices, the potential for China’s retaliation to Trump tariffs that may hurt US crop exports, and our positive outlook for global crop demand relative to supply.