Fun with Fertilizers

Research evidence excerpt

Fun with Fertilizers

ociate Analyst

Natural Gas: Input cost trends have seen a limited response to the Middle East james-p.cannon@ubs.com

+1-212-713 4057

conflict (neutral relative to our estimates for U.S. producers). Ex-U.S. gas prices

have moved higher recently on escalated tensions, adding additional cost curve Gaurav Sharma

support. We see potential upside to ex-U.S. gas prices later in 2026 on supply Associate Analyst

pressures with European injections tracking ~15% below 5yr averages that could gaurav-l.sharma@ubs.com

+1-212-713 4312

further support nitrogen prices.

Phosphates: Pricing remained elevated, supported by the cost curve and tight

supply conditions, though this has been suppressing demand at the farmer level.

Rising input costs have led to significant stripping margin pressure, with risks of

further production curtailments to pressure already tight global supplies if raw

material costs (particularly sulfur costs) remain at these high levels. The 3Q Tampa

sulfur contract settling well below expectations is a positive for MOS' U.S.

production outlook into 3Q, where increased curtailments had otherwise seemed

likely, but offshore spot sulfur pricing remains significantly higher, affecting Brazil

production and ex-U.S. regions broadly (i.e. OCP). The outlook here is further

clouded with the increased intensity of the Middle East conflict pushing an

improvement in trade flows further out.

Potash: Potash pricing has remained stable, underpinned by balanced supply-

demand fundamentals. We have seen minimal seasonal declines to date. While

higher freight costs will offset some of the pricing increase from pre-conflict levels,

overall pricing momentum and resilience have exceeded our expectations from

earlier in the year.