CF Industries Gains on Healthy Nitrogen Demand and Higher Prices

CF Industries Holdings, Inc. CF is benefiting from healthy nitrogen fertilizer demand in major markets and higher nitrogen prices amid headwinds from higher natural gas costs.

CF Industries, which is among the prominent players in the fertilizer space along with Nutrien Ltd. NTR, The Mosaic Company MOS and Intrepid Potash, Inc. IPI, is capitalizing on the growing global demand for nitrogen fertilizers, driven by strong agricultural activity. After pandemic-related challenges, industrial demand for nitrogen has recovered. 

Global nitrogen requirement is expected to remain strong in the near future due to recovering industrial demand and farmer economics. High levels of corn-planted acres in the United States should drive the demand for nitrogen. Demand in North America is expected to be fueled by favorable farm economics. CF Industries is also seeing strong demand for urea from Brazil and India. Demand for urea is likely to remain strong in Brazil on higher corn plantings and in India, driven by low inventory levels.

Higher nitrogen prices have also contributed to a boost in CF Industries’ revenues. In the third quarter, net sales rose roughly 21% year over year to roughly $1.66 billion. Average selling prices increased year over year, driven by strong global nitrogen demand, supply disruptions due to geopolitical issues, and higher global energy costs. Looking ahead, CF should continue to benefit from favorable pricing trends.

CF Industries continues to focus on enhancing shareholder value by utilizing its strong cash flow. Net cash provided by operating activities was $1.06 billion in the third quarter, up around 14% year over year. CF returned $445 million to shareholders in the third quarter and around $1.3 billion in the first nine months of 2025. The company completed the $3 billion share repurchase program in October 2025. It started a new $2 billion share repurchase program effective through 2029.

The company, however, faces headwinds from higher natural gas prices, a key feedstock for nitrogen fertilizer. It has seen a notable rise in natural gas costs during the first nine months of 2025. The average cost of natural gas increased to $2.96 per MMBtu (million metric British thermal unit) in the third quarter from $2.10 per MMBtu a year ago. The same for the first nine months increased to $3.34 per MMBtu from $2.38 per MMBtu in the year-ago period. Natural gas prices have shot up in Europe and Asia due to constrained supply availability. Higher gas costs are expected to weigh on CF’s margins.

CF, in its third-quarter call, said that the global nitrogen outlook remains positive, supported by strong demand and tight supply. India, Brazil, and North America are driving robust fertilizer consumption, while inventories remain below average despite resumed Chinese exports. Supply constraints from high energy costs and limited gas availability continue to pressure producers in Europe and Asia. 
 
Another prominent fertilizer maker, Nutrien expects record crop production prospects in the United States and strong demand for crop inputs. NTR raised potash sales volume guidance for 2025 to 14-14.5 million tons, driven by anticipated higher global demand.

Mosaic recently issued an update on fertilizer markets and preliminary selected fourth-quarter 2025 results. The company has been facing a challenging North American fertilizer demand due to pressure on grower economics and early winter weather. MOS sees fourth-quarter phosphate sales volumes of approximately 1.3 million tons and potash volumes of about 2.2 million tons, factoring in the challenging conditions.

Intrepid Potash saw a 15% increase in potash sales volumes to 62,000 tons in the third quarter. The solid increase in Intrepid Potash’s sales volumes was driven by a rise in production. IPI expects solid fertilizer demand driven by an improvement in the agriculture market and strong potash market fundamentals.

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This article originally published on Zacks Investment Research (zacks.com).

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