CVR Energy Inc. told analysts Aug. 5 that it has seen aggressive buying in its markets. “We haven’t seen the retailers pull back at all in terms of purchasing intentions and positioning themselves for the spring,” said Stanley Riemann, CVR chief operating officer.
He added that inventories are down. “We went into the second quarter with probably higher ammonia inventories than we normally do and we blew through those in April during the ammonia run. So it was a good call, with respect to our fertilizer marketing team.” As for UAN inventory, he said normally inventories should be somewhat stagnant; while they started out higher, they have drawn down to only 5-6,000 st.
“We’re now taking fill orders rather than spot orders,” added CEO and President John “Jack” Lipinski. “Last year, our forward book at this time was in the range of $130/st for UAN. This year our forward book is roughly $40/st higher. Our current fiscal book will carry us through the end of the year, and we foresee a continuing positive fertilizer market.” He added that agriculture was not as heavily impacted by the recession as other industries, and that fertilizer markets are stable-to-improving.
CVR said it is planning a fertilizer turnaround during the fourth quarter at a cost of $3.8 million, which will be expensed as incurred.