The Daily Inspector

Research evidence excerpt

The Daily Inspector

ociate Analyst

oversupply. This last weekly data showed a steep fall in US spot rates before the gaurav-l.sharma@ubs.com

+1-212-713 4312

more recent retreat in oil prices. There is still chance we get a squeeze up as

inventories come down for crude, but if the market views that as short-lived then Nicole Grueneberg

the stocks won’t get credit for it. And we’ve seen minimal evidence of supply Associate Analyst

closures that could tighten the PE markets sooner. nicole.grueneberg@ubs.com

+1-212-713-2469

We have a Sell rating on NTR (link), which will see nitrogen earnings decline and

we are more cautious on potash prices, although following recent declines NTR is

now approaching our $65/sh PT. CF has also fallen close to where it's now pricing

in no excess earnings (~$105/sh implied as of 1Q26 on our $2.05B midcycle at

~8.5x). This is likely too bearish from a fundamental perspective as we'd expect

residual impacts from Middle East production disruptions to continue to impact

the S/D and pricing in 2H26/2027. We note however that investors have been

positioned negatively on CF ahead of the reopening and we could temporarily see

CF over correct to the downside, with demand softness ahead of expectations of

further pricing declines adding risks to the 3Q outlook.

More diversified chems can also see benefits of easing raw materials and lagged

price declines. We think EMN could be a beneficiary here. Though the real

beneficiaries of lower costs will be more downstream chems. We don’t expect

immediate relief, but we see resolution as positive for RPM and ECL, which both

upgraded to Buy recently (RPM -link, ECL – link).

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