CF Industries (CF) Goldman Sachs Industrials and Materials Conference summary

Industry and market cycle overview

• Input providers like fertilizer have faced lower profitability despite healthy farmer economics in recent years.

• Current ag environment is challenging for farmers due to low crop prices and high input costs, especially for nitrogen fertilizer.

• Despite cost pressures, demand for nitrogen remains structurally positive, with 90 million acres of corn expected next year.

• Demand for nitrogen grows 1-2% annually, driven by new acreage and yield improvements, especially in South America.

• Precision and digital ag improve efficiency but are not expected to significantly reduce nitrogen demand in the near term.

Global trade, supply, and geopolitical impacts

• Global supply and demand, not just U.S. policy, are the main drivers of business health.

• Brazil and Argentina have become major fertilizer consumers and exporters due to currency devaluation and production growth.

• Russian and Iranian fertilizer exports continue despite geopolitical tensions; peace could reduce friction costs but not significantly alter supply.

• Nitrogen supply is expected to tighten over the next three years due to limited new investments, with most new capacity outside the U.S.

Clean energy, low-carbon products, and future investments

• Blue and green ammonia projects are progressing slowly; economics and incentives are key to adoption.

• First low-carbon ammonia product will launch in Q3, targeting ethanol, CPGs, and European markets under CBAM.

• Industrial customers are a growing market for low-carbon ammonia, especially for carbon reduction commitments.

• Japan, Korea, and Europe are seen as promising markets for clean ammonia, with shipping and steel also potential demand drivers.

• Methanol is the early winner for shipping fuel, but ammonia is expected to gain traction over the next decade as infrastructure develops.