By Adam L. Cataldo
Ammonia manufacturer LSB Industries said prices have moved up recently and that it expects them to moderate further as the year goes on after a period that saw a decline in prices.
LSB says urea prices have moved up recently due in part to Chinese urea export limitations, and that urea ammonium nitrate prices are beginning to do the same.
On the outlook for prices this year:
“Ammonia pricing is expected to moderate further in 2024 after recent pricing declines reflecting: Heavy ammonia application by U.S. farmers in Fall of 2023; natural gas prices in Europe have declined to their lowest levels since 2021 as a result of warm weather and high gas storage levels in the region; sluggish demand from the industrial sector in Europe and Asia.”
On the outlook for production volumes this year:
Estimates ammonia production of 780,000 tons to 800,000 tons.
On the outlook for sales volumes this year:
Sees AN and nitric acid sales volumes of 560,000 tons to 580,000 tons. Urea ammonium nitrate sales volumes of 560,000 tons to 580,000 tons. Ammonia sales volumes of 280,000 tons to 300,000 tons.
On the basis of its outlook for this year:
The forecasts for ammonia production and product sales volumes reflect turnarounds at the Pryor and Cherokee facilities, compared with no turnarounds last year.
On outlook for demand:
The company expects strong demand for nitrogen fertilizers in the spring planting season. Prices for ammonia and other nitrogen products should now prove attractive to retailers and farmers, the company said. U.S. corn prices are also providing support for fertilizer demand.
On nitric acid demand:
Demand is stable as the affects of high inflation in the U.S. are offset by global producers shifting production from international facilities to U.S. operations to take advantage of lower energy prices
On its industrial and mining business:
LSB said business was robust due to steady demand for industrial products supported by a resilient U.S. economy. “Demand for AN for mining applications is steady due to attractive market fundamentals for quarrying, aggregate production and U.S. metals.”
On expanding production at El Dorado:
“We have elected to delay the expansion of the production capacity of our El Dorado facility. After reviewing numerous factors, including current commodity market conditions and the other initiatives we have underway, we’ve determined that delaying the El Dorado expansion enables us to more effectively deploy resources to our other projects, while allowing us to maintain the strength of our balance sheet.”
Write to Adam Cataldo at adam.cataldo@wsj.com
