Subido por Mauricio Alvarado Foronda

2Q 2018 Presentation Yara

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Yara International ASA
2018 second quarter
results
17 July 2018
IR – 17 July 2018
2
Safe operations is our first priority
5
TRI (Total recordable injuries 12-month rolling)1
4.5
1.4
0
Jan'16
Jun'18
1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours.
IR – 17 July 2018
3
Market fundamentals currently challenging, but positive
developments towards 2019 on grain stocks and urea supply
Urea supply increases high in
2018, falling thereafter
Grain prices rising slowly, and
stocks are falling
Global capacity additions ex China
Grain price index
Million
tonnes
Days
Index
200
70
Strong Asian demand drives
LNG prices higher
6.7
LNG imports
140
121.3
106.2
4.5
Trend
consumption
growth
2.6
2.5
24.2
100
1/2015
0
40
1/2017
Grains Price Index
1/2019
24.0
2017
2018
Capacity growth
2019
2020
Supply increase
Asia
1H 2017
Europe
1H 2018
Grain stocks-to-use ex. China
IR – 17 July 2018
4
Yara’s 2Q results reflect the business environment where increased
deliveries and prices are offset by higher gas costs
Increased deliveries in Europe
following late spring
Million
tons N
European industry deliveries
Urea price development
+6%
2
Tight LNG market drives
European gas prices higher
Global urea price rebound in
June, but limited impact on 2Q
USD/t
USD/
MMBtu
400
9
Yara European natural gas cost
7.7
Imports
6.6
6.5
300
5.7
5.6
5.7
5.3
5.2
2Q17
3Q17
7.2
8.1
Yara Europe
7.7
6.1
TTF
(1-month
lag)
200
Domestic
0
2Q17
IR – 17 July 2018
2Q18
100
Jul-16
Urea fob Black Sea
Urea prilled fob China
Urea granular fob Egypt
Urea inland proxy China
0
Jun-18
1Q17
4Q17
1Q18
2Q18
5
Increased deliveries in all main markets except Brazil, where truck
strike impacts negatively
Kilotons
+11%
2Q17
7,331
2Q18
6,604
+18%
-19%
2,413
2,039
2,052
1,671
961
1,076
1,045
586
664 711
302
Yara
Europe
IR – 17 July 2018
Brazil
North
America
Asia
Latin
America
414
Africa
6
European market nitrate prices up 4%;
Yara realized NPK prices up 7%
USD/t
Nitrogen upgrading margins1
(monthly publication prices)
500
Yara NPK premium over blend1
USD/t
500
+4%
Urea Egypt
CFR proxy
+7%
CAN
(46% N)
Weighted average global
premium above blend cost
Nitrate premium, CIF inland Germany
Ammonia CFR
(46% N)
Urea, CIF inland Germany
DAP, CIF inland Germany
Yara EU gas cost *20
0
2Q15
4Q15
2Q16
Upgrading margin from gas to
nitrates in 46% N (USD/t):
4Q16
2Q17
250
1) All prices in urea equivalents, with 1 month time lag
IR – 17 July 2018
4Q17
2Q18
213
0
2Q15
MOP, CIF inland Germany
4Q15
2Q16
4Q16
2Q17
4Q17
2Q18
1) Yara NPK (average grade 19-10-13) net of transport and handling
cost., compared with nitrate, urea, DAP and MOP publication prices
Source: Fertilizer Market Publications
7
Yara Improvement Program delivering ahead of plan
Start: 2016
2017
2018
2019
2020
End: 2020
Today
EBITDA Benefits of 310 MUSD delivered

Yara Productivity System rolled out to 21 out of 29 sites.

Good reliability improvements in NPK production

Good improvements in procurement initiatives
310
0
IR – 17 July 2018
500
8
Yara Improvement Program accounts for ~20% of L12M EBITDA
MUSD
 L12M earnings impacted by lower fertilizer
prices and higher natural gas cost (~900
MUSD)
+24%
260
1,355
 Yara Improvement Program is (1) a driver of
improved long-term Yara performance and (2)
a response to challenging market conditions
1,095
L12M EBITDA
excl. special
items and YIP
IR – 17 July 2018
YIP
L12M EBITDA
excl. special items
 Measured at L12M margins and prices, the
equivalent number is approximately 260
MUSD. This represents almost 20% of Yara
L12M EBITDA excluding special items.
9
Earnings per share impacted by higher energy cost and currency
translation loss
x.xx
EBITDA
Earnings per share
Negative result includes a
currency translation loss of
USD 302 million, a non-cash
effect mainly resulting from a
strengthening US dollar through
the quarter, which is
fundamentally positive for Yara
USD millions
0.77
480
0.59
395
359
338
296
664
347
350
1.35
377
321
0.47
0.42
0.34
381
363
352
242
2Q16 3Q16
4Q16 1Q17
2Q17
EPS excluding currency and
special items
370
303
312
3Q17
4Q17 1Q18 2Q18
296
0.19
0.36
0.42
0.41
0.73
0.30
0.33
0.38
0.42
0.17
-0.14
2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
-0.77
Average number of shares for 2Q 2018: 273.2 million (2Q 2017: 273.2 million).
IR – 17 July 2018
10
EBITDA 5% lower YoY as higher sales prices and deliveries were
more than offset by higher energy cost and a weaker US dollar
EBITDA, USD millions
-5%
20
EBITDA ex. SI
2Q17
86
74
338
Price/Margin
IR – 17 July 2018
Volume
Energy costs
14
12
Currency
Other
321
EBITDA ex. SI
2Q18
11
Higher natural gas cost expected for the next two quarters
Yara European natural gas cost
USD/
MMBtu
Y-o-Y change in Yara gas cost
USD
millions
9.0
120
8.0
100
7.0
80
6.0
60
5.0
4.0
40
3.0
20
20
12
91
100
20
45
70
42
46
4Q17
1Q18
27
2.0
2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
TTF (1-month lag)
*Dotted lines denote forward prices as of 10 July 2018
Source: Yara, World Bank, Argus/ICIS Heren
IR – 17 July 2018
Yara Europe
0
2Q17
3Q17
EU/US actual
Pilbara actual
2Q18
3Q18
4Q18
EU/US estimate*
12
Yara investment activity peaked in first half 2018
Net interest-bearing debt
Capex plan
+10%
3.2
Cost&capacity improvements
USD billions
M&A
0.2
Committed growth
2.9
Maintenance
2.3
0.2
0.4
0.7
1.6
-25%
0.2
1.3
0.2
0.0
1.0
0.6
0.6
0.8
0.7
2017
2018
1H18
0.6
2H18
1.3
0.2
0.4
1.0
0.2
0.1
0.7
0.7
2019
2020
Net debt
Mar 18
Net
Cash
Dividends Investments Yara
operating earnings* received
(net)
dividend
capital
equity
change
acc. Inv.
Net debt
Jun 18
* Operating income plus depreciation and amortization, minus tax paid, net gain/(loss) on disposals, net interest expense and bank charges
IR – 17 July 2018
13
Yara Improvement Program delivering ahead of plan
Start: 2016
2017
2018
2019
End: 2020
2020
Today
Annual impact, USD million, vs. 2015 baseline, at 2015 margins
450
 The Yara Improvement
Program has so far delivered
310 million US dollars of
annual sustained benefits,
measured at 2015 margins
310
Sustained
EBITDA
improvement
500
350
242
84
One-off
 The equivalent number using
2018 margins is ~300 million
US dollars
60
69
Cost
14
49
Investments
69
Benefits1
19
15
15
15
12
39
13
11
500
 Improvements on Production
volume, Consumption factor
and Variable unit costs are on
or ahead of target
2016
IR – 17 July 2018
1 One-off
140
116
90
18
2017
Q2 2018
benefits are related to working capital improvements and sales of white certificates
0
2018 target
2019 target
2020 target
14
Steady growth in grain consumption, production expected to fall
short for the 2018/19 season
Grain consumption and production
Days of consumption in stocks
Days
Million tons
100
2,600
95
90
85
80
75
70
65
60
55
2,000
08
09
10
11
12
13
Consumption
14
15
16
17 18E 19F
08
09
10
11
12
13
14
15
16
17 18E 19F
Production
Source: USDA July 2018
IR – 17 July 2018
15
Strong urea supply growth this year, but supply-demand balance
set to gradually improve after 2018
Global urea capacity additions excl. China (mill. tonnes)
India
Iran
USA
Russia
Algeria
Others
Production
6.7
4.7
4.5
3% consumption growth
3.4
2.6
2.6
2.5
1.9
1.1
2014
2015
2016
2017
2018
2019
2020
2021
2022
Source: CRU June 2018 - CRU has removed Dangote Fertilizer, Nigeria (3 mill tons) from the medium-term forecast and shifted the project to 2023
IR – 17 July 2018
16
Yara’s solutions improve food production per hectare,
delivered through products with lower emissions per tonne
Yara crop nutrition practices enable farmers to
optimize application – and thus lower emissions
Yara’s product mix has significantly lower
emissions than the industry average
Yara
Industry
product mix product mix
kg CO2eq/kg N product
Yara Nitrates1
Global
Nitrates2
• Precision farming promotes best agricultural practices
• Yara’s N-sensor, N-tester and water sensor help
optimize application rates and water use
• Yara’s solutions help farmers comply with
environmental legislation while supporting their
competitiveness
UAN
7.6
1.
2.
~10%
~5%
~5%
~10%
~50%
9.4
11.9
Urea
13.9
Production
IR – 17 July 2018
~75%
Assumed 15% lower application rates for nitrates, due to lower volatilization
Average emissions from production higher, partly driven by plants running without N2O catalysts
Application
17
Yara’s mission and vision guides our strategy
Our Mission
Our Vision
Responsibly feed
the world and
protect the planet.
A collaborative society;
a world without hunger;
a planet respected.
IR – 17 July 2018
18
The Crop Nutrition
Leader
Advance
Operational
Excellence
We will grow responsible solutions to
farmers, industry and society, while
delivering superior return on capital
Create
Scalable
Solutions
IR – 17 July 2018
Drive
Innovative
Growth
19
Advance
Advance Operational excellence;
Improved safety, increased savings
Examples of strategic responses
Safe operations is our first priority
5
TRI (Total recordable injuries 12-month rolling)1
4.5
1.4
0
Jan'16
Jun'18
1) TRI: Total recordable injuries, lost time (absence from work), restricted work and medical treatment cases per one million work hours.
IR – 17 July 2018
IR – 17 July 2018
3
20
Create Scalable Solutions;
Closer collaboration with the Food Industry
Examples of strategic responses
Create
Food Industry
Farmer
Crop
Market depth
Product
Sell benefits of our
solutions
Asset
Farmer centric
solutions and
tools
Build crop
solutions
Sell what we
produce
•
•
Place new capacity
Manage seasonality
Build product
reputation
•
•
High quality
products
Viking ship brand
•
•
•
•
Crop knowledge
Product portfolio
Application
competence
Building Yara’s
knowledge margin
•
•
Deliver required crop
quality to processor
and ensure reliable
raw material supply to
food factories
Unlock superior value
creation for farmers
through food industry
Time
IR – 17 July 2018
21
Precision fertilization made simple - atfarm

10x10m precision application of fertilizer

Quantitative recommendation “in only 5
clicks”

Empowered by 20 years of Yara precision
fertilization R&D

Benefits for farmers
- Higher yield
- Reduced waste
- Higher protein content
IR – 17 July 2018
Examples of strategic responses
Create
22
Examples of strategic responses
Drive Innovative Growth;
Yara is delivering on its growth pipeline
1 Jan
2018
1Q
Babrala (India)
Acquisition of urea plant and distribution
assets
2Q
Cubatao (Brazil)
N and P production facility acquisition
- 1.2 mt urea and approx 40 MUSD EBITDA
p.a.
- Provides footprint to accelerate premium
product growth
- 1.4 mtpa and approx. 60 MUSD EBITDA p.a.
- Strengthens production and industrial
footprint in Brazil
Porsgrunn (Norway)
NPK and calcium nitrate expansion
Freeport (US)
Hydrogen-based ammonia new-build JV
with BASF (Yara 68%)
- Adds 250 ktpa and approx. 50 MUSD
EBITDA p.a.
- Record nitric acid production in March (5,127
tpd)
- 550 ktpa and approx. 100 MUSD EBITDA
p.a. (Yara share)
- Strengthens Yara’s global ammonia position
Drive
3Q
4Q
1 Jan
2019
Sluiskil (NL)
Revamp and urea+S expansion
- Adds approx. 210 ktpa and 30 MUSD
EBITDA p.a.
- Improved product mix - from urea prills to
nitrates and urea+S
Köping (Sweden)
Nitric acid revamp and TAN expansion
- 90 ktpa and approx. 20 MUSD EBITDA p.a.
- Strong long-term fundamentals for civil
explosives industry
Salitre (Brazil)
Phosphate mine
- Adds approx. 1.1 mtpa SSP equivalents by
2020
- Limited earnings until chemical production
starts end 2019
EBITDA figures at 2015 prices except Cubatão which reflects business case prices
IR – 17 July 2018
23
Major improvement and growth investments in 2018;
main earnings improvement from 2019 onwards1
Improvement and growth capex2 (BUSD)
Drive
EBITDA improvement3 (MUSD)
Improvement program
Committed expansions + M&A
1.5
1,100
900
0.1
500
500
Improvement program:
+ 350 MUSD cost improvement
+ 150 MUSD volume improvement:
-> 0.4 mill. tonnes ammonia
-> 0.7 mill. tonnes fertilizer
0.9
0.1
282
124
450
350
450
40
242
40
150
2016
2017
2018
2019
600
2020
0.8
0.1
Committed expansions + M&A:
+ 1.4 mill. tonnes ammonia
+ 4.7 mill. tonnes fertilizer
1.3
0.5
0.9
Earnings improvement3 (USD per share)
2.0
1.5
0.1
1.2
0.6
0.9
0.6
0.4
0.2
0.9
0.6
0.2
2016
2017
2018
2019
1.1
2020
2016
0.7
0.4
0.0
2017
2018
2019
2020
1 Currency
assumptions for 2018 onwards: USD/NOK 8,01, EUR/USD: 1.18 , USD/BRL: 3.83
2.Excluding maintenance capex on existing assets . Yara’s share of capex. Fully consolidated entities presented at 100% basis
3 Measured at 2015 conditions. Main average market prices: Ammonia fob Yuzhny 390 USD/t, Urea fob Yuzhny 275 USD/t, DAP fob Morocco 495 USD/t
IR – 17 July 2018
24
Additional information
IR – 17 July 2018
Yara has expected commodity nitrogen oversupply, and has
focused its growth pipeline on premium & industrial products
Growth focused on premium & industrial
Expand premium products
sales and supply
Expand commodity scale
based on attractive full-cost
growth opportunities
Act on attractive
opportunities to grow
industrial sales and supply
Structurally secure P and K
supply
Expected start up
Uusikaupunki NPK
Porsgrunn/Glomfjord CN/NPK
Sluiskil urea+S
Rio Grande NPK/NPK blends
3Q 2016
1Q 2018
3Q 2018
2H 2020
Freeport ammonia JV
2Q 2018
Pipeline EBITDA (2015 prices, USDm)1
160
180
2019
2020
150
150
190
40
2018
2021
150
70
Babrala urea acquisition
1Q 2018
2018
Pilbara – TAN
2Q 20172
Köping – TAN
3Q 2018
40
Cubatão – N and P
2Q 2018
2018
Galvani / Salitre
mining 2Q18, chemical 4Q19
0
2018
Sum
150
2019
2020
2021
90
110
120
2019
2020
2021
170
170
2019
2020
2021
430
610
620
30
1) Including
Yara’s share of volume in equity accounted investees. Fully consolidated entities presented at 100% basis
2) Plant started up in 2Q 2017, but has suffered from technical difficulties and the site is currently undergoing a turnaround.
IR – 17 July 2018
26
Yara is delivering on its growth pipeline;
multiple plant expansions and M&A coming on stream in 2018
Production growth 2015 - 2020
Mill.tonnes (mt)
Finished products
Ammonia
9.2
25.1
0.2
0.5
0.2
GrowHow UK (divested mid-2015)
0.1
1.2
0.7
7.7
0.2
0.4
Yara share of Qafco & Lifeco
20.6
0.3
0.5
0.8
Yara-operated plants
1.2
0.3
0.2
0.3
1.1
1.6
18.7
6.4
20151
1)
2)
3)
4)
5)
Uusikaupunki
(3Q 2016)
5
TAN
Pilbara
(2Q 2017)
Babrala
(1Q 2018)
Por/Glo
(1Q 2018)
Cubatão
(2Q 2018)
Sluiskil
(3Q 2018)
Köping
(3Q 2018)
Salitre 2
(4Q
2019)
Rio Grande 3
(2Q 2020)
Est. 2020
20151
Pilbara4
Babrala
(1Q 2018)
Freeport
(2Q 2018)
Cubatão
(2Q 2018)
Est. 2020
Adjusted to normalized / 2016 turnaround level (0.7mt finished fertilizer and 0.2mt NH3) and regularity level (0.7mt finished fertilizer and 0.4mt NH3)
Salitre will reach 1.1 mill.tonnes in 2022
Rio Grande expansion also adds 1 million tonnes NPK blends by 2020
Including 100% ownership in Pilbara NH3 plant (not included in committed growth pipeline)
TAN Pilbara started up in 2Q 2017, but has suffered from technical difficulties and the site is currently undergoing a turnaround
IR – 17 July 2018
27
Improvement and growth investments; earnings and sensitivities
Improvement program: Impact2 of +100 USD/t price change
(USD/share)
EBITDA improvement1 (MUSD)
1,100
900
0.09
500
450
0.06
500
282
124
350
450
242
40
40
2016
2017
600
150
2018
2019
Ammonia
2020
Urea
Growth: Impact2 of +100 USD/t price change (USD/share)
Earnings improvement1 (USD per share)
2.0
1.5
0.30
1.2
0.9
0.19
0.10
1.1
0.6
0.2
0.9
0.6
2016
0.7
0.4
0.2
Ammonia
Urea
DAP
3
0.0
2017
2018
2019
2020
Improvement program
Growth
IR – 17 July 2018
1 Measured at 2015 conditions. Main average market prices: Ammonia fob Yuzhny 390 USD/t, Urea fob
Yuzhny 275 USD/t, DAP fob Morocco 495 USD/t.
2 Improvement: 2020 numbers. Growth: At full capacity (2019 for urea and ammonia, 2020 for DAP).
3 Phosphate-driven price change, equivalent to 138 USD/t phosphate rock (72 bpl)
28
Higher margins in Crop Nutrition and Industrial segment
EBITDA excluding special items
EBITDA
(USD millions)
180
163
166
153
101
118
63
95
54
44
Crop Nutrition
IR – 17 July 2018
Industrial
2Q17
2Q18
Production
29
Debt/equity ratio
Net interest-bearing debt / equity ratio (end of period)
0.35
0.30
0.25
0.22 0.22
0.17
0.13
0.16
0.15
0.13
0.14
0.17
0.18
0.11
0.08
0.06 0.06
0.05 0.06
0.06
0.01
-0.04
2013
IR – 17 July 2018
2014
2015
2016
2017
2018
30
Lower upgrading margins to nitrates, premiums in line with last
year
USD/t
Nitrogen upgrading margins1
(monthly publication prices)
500
USD/t
90
+4%
Urea Egypt
CFR proxy
European nitrate premium2
(quarterly Yara realized)
CAN
(46% N)
Ammonia CFR
(46% N)
Yara EU gas cost *20
0
2Q15
0
4Q15
2Q16
4Q16
Upgrading margin from gas to
nitrates in 46% N (USD/t):
Source: Fertilizer Market Publications
IR – 17 July 2018
2Q17
250
4Q17
2Q18
213
2Q15
4Q15
2Q16
4Q16
2Q17
4Q17
2Q18
2) Yara European realized nitrate prices (excl. sulphur grades) compared
with urea publication prices (Egypt CFR proxy) with
1 month time lag. All numbers in USD per tonne of CAN equivalents.
31
Solid commodity phosphate margins and compound NPK premiums
NPK premium over blend1
Phosphate upgrading margins
USD/t
500
USD/t
500
DAP FOB US Gulf
Weighted average global
premium above blend cost
Value above
raw material
Nitrate premium, CIF inland Germany
Urea, CIF inland Germany
NH3, fob Black Sea *0.22
DAP, CIF inland Germany
Rock, fob North Africa *1.4
0
2Q15
Source: Fertilizer Market Publications
IR – 17 July 2018
2Q18
0
2Q15
MOP, CIF inland Germany
4Q15
2Q16
4Q16
2Q17
4Q17
2Q18
1) Export NPK plants, average grade 19-10-13, net of transport
and handling cost.
32
Energy cost
Yearly averages 2009 – 2015, quarterly averages for 2016-18 with forward prices* for 3Q18 and 4Q18.
10.7
11.0 11.4
10.5
9.2
7.6
8.2
6.6
9.1
8.1
9.4
8.0
8.0
6.6
8.1
6.9
4.7 5.7
4.8
4.0
4.4
7.1
6.4
5.0
4.6
4.9
5.3
5.4
4.4
3.8
4.2
4.0
4.3
2.8
3.0
5.5
4.2
4.4
4.0
4.1
3.7
2.8
6.6
6.5
2.6
2.0
5.7
5.6
5.7
5.3
3.0
5.2
7.4
6.5
5.5
5.9
8.5
8.2
7.8
8.0
6.2 6.2
6.1
4.7
3.2
2.9
3.5
2.9
2.8
2.8
2.8
2.1
2009 2010 2011 2012 2013 2014 2015 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18
US gas price (Henry Hub)
Yara Global
TTF day ahead (Zeebrugge 2009-2012)
Yara Europe
*Dotted lines denote forward prices as of 10 July 2018
Source: Yara, World Bank, Argus/ICIS Heren
IR – 17 July 2018
33
Increased ammonia and finished products production
Ammonia1
Finished fertilizer & industrial products1
Kilotons
Kilotons
+13%
2,200
+10%
5,500
Urea
Nitrates
NPK
0
CN
UAN
SSP
0
2015
2016
2017
2018
2015
2016
2017
2018
1) Including share of equity-accounted investees
IR – 17 July 2018
34
Fertilizer deliveries
Kilotons
7,000
Outside
Europe
Europe
0
2011
IR – 17 July 2018
2012
2013
2014
2015
2016
2017
2018
35
Yara 2Q fertilizer deliveries by market and product
Kilotons
2Q17
2Q18
2,413
2,052
2,039
1,671
664
Europe
Brazil
961
711
1,076
1,045
586
Latin America
North America
414
302
Asia
Africa
1,872
1,213
1,359
Compound NPK
1,097
1,007
Blend NPK
1,137
1,401
Nitrate
1,244
Urea
1,094
846
Other products
475
465
UAN
371
355
CN
1) Yara-produced compound NPK and third party sourced (Total NPK excluding blend NPK)
IR – 17 July 2018
36
Fertilizer deliveries by product and source
Kilotons
1,872
1,401
1,449
1,359
1,213
1,137
1,244
1,097
1,217
1,007
465
475
2Q17 2Q18
2Q17 2Q18
2Q17 2Q18
2Q17 2Q18
2Q17 2Q18
Nitrate
NPK compounds
NPK blends
Urea
UAN
Yara-produced deliveries
IR – 17 July 2018
2Q17 2Q18
Other
Joint venture & third party sourced
37
Strong premium product deliveries
Value-added fertilizer deliveries1
Value-added fertilizer deliveries1
4,000
407
375
3,500
369
333 327
355
312 311
3,000
260
2,500
201 204
2,000
CAGR
9%
1,500
218
142
1,000
63
83
500
0
2Q14
2Q15
2Q16
2Q17
Outside Europe
1) YaraBela, YaraMila and YaraLiva deliveries
IR – 17 July 2018
2Q18
Asia
Brazil
Latin
America excl.
Brazil
Africa
2Q16
2Q17
2Q18
Europe
North
America
38
AdBlue deliveries
Kilotons
600
0
2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18
IR – 17 July 2018
39
Yara stocks
Kilotons
Finished fertilizer
8,000
Other
Compound
NPK
Nitrates
0
IR – 17 July 2018
Urea
40
Improving grain economics – the Food and Cereal Indexes at 5year average
FAO price index
Index
300
250
200
150
100
50
0
1/2006 1/2007 1/2008 1/2009 1/2010 1/2011 1/2012 1/2013 1/2014 1/2015 1/2016 1/2017 1/2018
Cereals Price Index
Cereals 5 year avg.
Food Price Index
Food 5 year avg.
Source: FAO
IR – 17 July 2018
41
Non-commercials’ net long position in corn
Thousand contracts
500
400
300
200
100
0
-100
-200
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Jan-17
Jan-18
Source: US Commodity Futures Trading Commission
IR – 17 July 2018
42
China: Coal prices still supporting the urea market
Coal price in China (fob Qinhuangdao 5500, RMB/mt)
China anthracite and urea prices (RMB/mt)
900
2018
2017
2016
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: IHS, CFMW
IR – 17 July 2018
43
Stable Chinese urea pricing, global market moving up sharply
through June, almost no Chinese exports
Increasing urea pricing (USD/ton)
Chinese export close to zero (1000 tons)
390
2,400
2,200
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
370
350
330
310
290
270
250
230
210
190
170
Urea fob Black Sea
Urea granular fob Egypt
Source: BOABC, CFMW
IR – 17 July 2018
Urea prilled fob China
Urea inland proxy China
44
Chinese domestic supply slightly up, as export decline more than
offsets lower production
Chinese urea production down vs last year (million tons)
Export reduction exceed production decline(million tons)
5.2
60
49.8
4%
43.8
50
16/17
40
48.1
45.7
6.0
2.5
30
20
10
Source: CFMW, covering close to 100% of production
IR – 17 July 2018
Jul-May 16/17
Production
Export
Domestic
Domestic
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Export
3.6
0
Production
17/18
Jul-May 17/18
45
Deliveries in USA similar to last season, in West Europe modestly
down
USA
Million tons N
West Europe
Million tons N
0%
18
-4%
8
Net imports
Imports
Domestic
Production
0
0
13/14
14/15
15/16
16/17
17/18
13/14
14/15
15/16
16/17
17/18
Source: Yara estimate for fertilizer deliveries to selected West European countries.
Total nitrogen deliveries based on TFI, US Trade Commission, Blue-Johnson and Yara estimates
IR – 17 July 2018
46
European producers’ nitrate stocks
Index
June 2007 = 1
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
Jul
Aug
17/18
Sep
Oct
12/13
Nov
13/14
Dec
14/15
Jan
Feb
15/16
Mar
Apr
May
Jun
16/17
Source: Fertilizers Europe, June estimate by Yara
IR – 17 July 2018
47
Modest import catch-up need in India
Calendar year
Season-to-date (Apr – Jun)
+2.6%
+1.7%
29.4
Million
tonnes
26.9
25.5
22.6
20.8
26.4
20
20.7
30.2
29.7
29.6
30.6
21.5
22
22.3
23
22.7
6.3
Million
tonnes
27.3
23.5
19.7 20.1
32.5
31.5
23.7
24.4
5.6
23.7
2017
2005
Production
IR – 17 July 2018
6.4
6.0
2016
2017
Sales
48
Key value drivers – quarterly averages
Urea prilled fob Black Sea (USD/t)/Urea
granular fob Egypt (dotted line, USD/t)
TTF day ahead (USD/MMBtu)
7.7
6.6
5.0
5.5
2Q17
3Q17
7.3
190 201
4Q17
1Q18
2Q18
US gas price Henry Hub (USD/MMBtu)
3.0
2.9
2.9
3.1
2Q17
207
234
3Q17
244
272
229
4Q17
261
1Q18
227 247
2Q18
Ammonia fob Black Sea (USD/t)
CAN cif Germany (USD/t)
198
205
2Q17
3Q17
239
245
4Q17
1Q18
211
2Q18
NOK/USD exchange rate
8.5
2.9
286
282
287
231
8.2
198
8.0
8.0
7.8
2Q17
3Q17
4Q17
1Q18
2Q18
2Q17
3Q17
4Q17
1Q18
2Q18
2Q17
3Q17
4Q17
1Q18
2Q18
Source: Fertilizer Market Publications, CERA, World Bank, Norges Bank
IR – 17 July 2018
49
10-year fertilizer prices – monthly averages
USD/t
USD/t
Ammonia fob Black Sea
1,000
500
800
400
600
300
400
200
200
100
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
USD/t
Urea prilled fob Black Sea/Urea granular fob Egypt
0
2008
USD/t
CAN cif Germany
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
DAP fob US Gulf/MOP granular fob Vancouver
1,200
800
1,000
600
800
600
400
400
200
200
0
2008
2009
2010
2011
2012
2013
Source: Fertilizer Market Publications
IR – 17 July 2018
2014
2015
2016
2017
2018
0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Average prices 2008 - 2017
50
IR – 17 July 2018
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