On the heels of a successful countervailing duty (CVD) case brought by The Mosaic Co. against phosphate imports from Morocco and Russia, could a similar case be around the corner brought by U.S. producers against Russian UAN imports? That was a question asked of CF Industries Holding Inc., Deerfield, Ill., on May 6 by analysts after they had perused CF’s first-quarter UAN performance (see Earnings Section).
Of the five CF segments, UAN had the worst performance by far, posting a gross margin of only $2 million on net sales of $232 million, down from the year-ago $42 million and $235 million, respectively. It was the only CF segment to see a price decrease.
Even before quizzed by analysts, CF President and CEO Tony Will said “that our UAN segments results do not fully reflect the positive environment at hand. We continued to face challenges there from subsidized Russian UAN imports that have depressed prices in North America.”
Will told analysts that the Mosaic case also involved subsidized gas. “…And when you peel back the onion and look at that, there’s a direct correlation to the incoming product, and the resulting nature that drove down prices.”
CF Senior Vice President and CFO Chris Bohn added that with Mosaic, the gas angle was even less in DAP and MAP, but that it would be 70-80 percent of the cost of UAN production. “So, when ITC found that there was subsidized gas and therefore duties that the Russians need to pay, you know if that’s true on MAP and DAP it should be for UAN. So I’d say it’s something we’re continuing to take a hard look at.”