N.A. Chems & Pkg "Fun with Fertilizers; Where to From Here?" Beaumont

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N.A. Chems & Pkg "Fun with Fertilizers; Where to From Here?" Beaumont

view the gas market as pricing in a james-p.cannon@ubs.com

shorter-term duration for production interruptions. +1-212-713 4057

Phosphates: Phosphate stripping margins are seeing significant compression Gaurav Sharma

driven by highly elevated input costs for sulfur/ammonia that have increased well Associate Analyst

gaurav-l.sharma@ubs.com

above the move higher in phosphate prices. Compressed margins are driving

+1-212-713 4312

supply curtailments (OCP, MOS, PhosAgro), that combined with outages are

further constraining supply against an already tight S/D setup. This has kept

upward pressure on already elevated prices despite weaker demand tied to

affordability issues. As stripping margins continue to compress globally, we see

risks of further supply cuts which should theoretically flow back into higher

pricing, but it's not clear that the market can bear those higher prices. This setup is

negatively impacting the earnings for MOS/NTR phosphate businesses.

Potash: Pricing has moved up since the onset of the Middle East disruption on the

combination of peak northern hemisphere demand, increased demand from Brazil

and on higher freight costs. We've yet to see pricing start to move lower, though

we expect modest declines seasonally as 2Q progresses. Demand destruction risks

have also been more limited (~5–15%) relative to phosphates. We don't expect

producer margins to benefit as much as the headline price increases which have

partially been driven by freight impacts. Supply from the Middle East is largely

uninterrupted.

Crop pricing: Corn futures for 2026/2027 are up $0.25-$0.30 since the Middle

East conflict on lower production expectations tied to reduced fertilizer