David Simmons

David Simmons asked about Faustina's ammonia availability in 2026 (50% more than 2025) and how much of Mosaic's ammonia requirement it will serve. He also inquired how the increased value of sulfur inventory is accounted for in adjusted EBITDA, specifically if there was an inventory gain.

Answer

President and CEO Bruce Bodine confirmed Faustina's production will be up to 50% more in 2026, serving 35%-40% of the portfolio as produced ammonia, reducing exposure to spot markets. EVP and CFO Luciano Siani Pires clarified there is no revaluation of inventory or gains recorded in EBITDA. He explained that in Brazil, purchased nutrient prices affect inventory value, but in North America, inventory is recorded at cost of production.

David Simmons asked about Faustina's ammonia availability in 2026, specifically if it will be 50% more than in 2025, and how much of Mosaic's ammonia requirement will be served by Faustina. He also inquired how the increased value of sulfur inventory was accounted for, asking if there was an inventory gain in adjusted EBITDA for the phosphate business.

Answer

President and CEO Bruce Bodine confirmed that Faustina's ammonia production is expected to be up to 50% higher in 2026, serving 35-40% of the portfolio and reducing spot market exposure. EVP and CFO Luciano Siani Pires clarified that there is no revaluation of inventory or gains recorded on EBITDA; inventory values in Brazil increase due to higher purchased nutrient prices, while North American inventory is recorded at cost of production.

David Simmons questioned CF Industries' assumption of a 4-6 million ton urea export quota from China in 2026, considering additional capacity coming online and high inventories, suggesting a potentially higher export volume.

Answer

Martin Jarosick, Vice President of Investor Relations, CF Industries, acknowledged the possibility of higher exports but noted China's shift since 2015-2017 to prioritize domestic farmers. He explained that running China's capacity at an 80% rate, consistent with recent years, leaves limited product for export, making the 4-6 million ton estimate conservative.

David Simmons questioned CF Industries' assumption of a 4-6 million ton export quota from China in 2026, which is flat year-on-year, despite China having 4 million tons of additional capacity coming online and high inventories. He asked why the estimate wasn't higher, perhaps 6-7 million tons.

Answer

Chris Bohn, President and CEO, acknowledged the possibility of higher exports but noted China's shift from high export activity to prioritizing domestic farmers. He suggested that running China's capacity at an 80% rate, which is their historical average, doesn't leave much for export, making the 6-7 million ton estimate potentially high.

Dave Simmons asked about the potential impact of LNG Canada ramping up on AECO gas prices and any mitigation strategies Nutrien might employ.

Answer

Ken Seitz, President and CEO, noted that with the Trinidad plant shutdown, 50% of Nutrien's nitrogen fleet is now exposed to AECO gas and 50% to Henry Hub, significantly reducing the effective gas price compared to when Trinidad was running. He expressed confidence in North America's persistent structural advantage in gas costs due to abundant, cost-effective volumes, despite LNG exports potentially flattening global prices. He stated that Nutrien is pleased with its structural advantage.

Dave Simmons inquired about the anticipated impact of LNG Canada's ramp-up on AECO natural gas prices and what mitigation strategies Nutrien might employ to address any potential effects.

Answer

Ken Seitz, Nutrien's President and CEO, explained that with the Trinidad operations offline, 50% of Nutrien's nitrogen fleet is now exposed to AECO gas and 50% to Henry Hub, a significant shift from the previous 20% Trinidad and 80% North America split. This change has dramatically reduced the company's effective gas price. Seitz expressed confidence in North America's persistent structural advantage in gas costs, attributing it to vast, cost-effective domestic volumes. He believes this structural delta will endure, even with the potential flattening effects from LNG Canada or other LNG projects.