Chemicals For The Non-Chemist Plant Nutrients And Plant Nutrient Markets
Chemicals for the Non-ChemistPlant Nutrients and PlantNutrient MarketsCiti Basic Materials ConferenceNovember 29, 2021Andy J. JungVP, Market and Strategic Analysis
Forward Looking StatementsThis presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but arenot limited to, statements about proposed or pending future transactions or strategic plans and other statements about future financial and operating results. Suchstatements are based upon the current beliefs and expectations of The Mosaic Company’s management and are subject to significant risks and uncertainties. Theserisks and uncertainties include, but are not limited to: the economic impact and operating impacts of the coronavirus (Covid-19) pandemic, the potential drop in oildemand/production and its impact on the availability and price of sulfur, political and economic instability and changes in government policies in Brazil and othercountries in which we have operations; the predictability and volatility of, and customer expectations about, agriculture, fertilizer, raw material, energy andtransportation markets that are subject to competitive and other pressures and economic and credit market conditions; the level of inventories in the distributionchannels for crop nutrients; the effect of future product innovations or development of new technologies on demand for our products; changes in foreign currency andexchange rates; international trade risks and other risks associated with Mosaic’s international operations and those of joint ventures in which Mosaic participates,including the performance of the Wa’ad Al Shamal Phosphate Company (also known as MWSPC), the timely development and commencement of operations ofproduction facilities in the Kingdom of Saudi Arabia, and the future success of current plans for MWSPC and any future changes in those plans; difficulties withrealization of the benefits of our long term natural gas based pricing ammonia supply agreement with CF Industries, Inc., including the risk that the cost savings initiallyanticipated from the agreement may not be fully realized over its term or that the price of natural gas or ammonia during the term are at levels at which the pricing isdisadvantageous to Mosaic; customer defaults; the effects of Mosaic’s decisions to exit business operations or locations; changes in government policy; changes inenvironmental and other governmental regulation, including expansion of the types and extent of water resources regulated under federal law, carbon taxes or othergreenhouse gas regulation, implementation of numeric water quality standards for the discharge of nutrients into Florida waterways or efforts to reduce the flow ofexcess nutrients into the Mississippi River basin, the Gulf of Mexico or elsewhere; further developments in judicial or administrative proceedings, or complaints thatMosaic’s operations are adversely impacting nearby farms, business operations or properties; difficulties or delays in receiving, increased costs of or challenges tonecessary governmental permits or approvals or increased financial assurance requirements; resolution of global tax audit activity; the effectiveness of Mosaic’sprocesses for managing its strategic priorities; adverse weather conditions affecting operations in Central Florida, the Mississippi River basin, the Gulf Coast of theUnited States, Canada or Brazil, and including potential hurricanes, excess heat, cold, snow, rainfall or drought; actual costs of various items differing frommanagement’s current estimates, including, among others, asset retirement, environmental remediation, reclamation or other environmental regulation, Canadianresources taxes and royalties, or the costs of the MWSPC; reduction of Mosaic’s available cash and liquidity, and increased leverage, due to its use of cash and/oravailable debt capacity to fund financial assurance requirements and strategic investments; brine inflows at Mosaic’s potash mines; other accidents and disruptionsinvolving Mosaic’s operations, including potential mine fires, floods, explosions, seismic events, sinkholes or releases of hazardous or volatile chemicals; and risksassociated with cyber security, including reputational loss; as well as other risks and uncertainties reported from time to time in The Mosaic Company’s reports filedwith the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements.
The Mosaic Company3
High Quality Asset Portfolio#2 Phosphate capacity#4 Potash capacity#1 Premium fertilizer producerDistribution assets in key marketsGlobal potash sales through CanpotexLargest global finished phosphate andpotash producer4
Focused on The AmericasHome base in North America: 73% of 2020 NA phosphate production 34% of 2020 NA potash productionLeading position in Brazil: Solidified through 2018 acquisition of Vale Fertilizantes Largest in-country producer Logistically advantaged production Port ownership and access5
Plant Nutrients andPlant Nutrient Products6
Plant Nutrients Plant nutrients are plant food (and common chemicalelements) 17 chemical elements are required for plant growth N-P-K: the carbohydrates-protein-fat in a plant’s diet Growing importance of secondary nutrients and micronutrients,especially in high yield systems Each plant nutrient product is identified by three numbers,referred to as its “analysis” – the percentage of each primarynutrient contained in a unit of the productPlant Nutrient Analysis## - ## - ##NPK7
The Nutrient Challenge: Maintaining SoilFertility AND Safeguarding the EnvironmentNutrient Removal by Croplbs Acre Soil fertility is maintained byreplenishing the nutrients removed bycrops each year by following bestpractices and the 4-RsNP2O5K2OSCorn - 200 Bu Acre Soybeans - 70 Bu Acre 9612381119Wheat - 80 Bu Acre YieldGrain12048Straw5613Total17661Source: IPNINote that P&Knutrient removal issimilar for corn andsoybeans8
Increasing Efficacy of Plant Nutrient Use (nearingmaximum efficiency in places – e.g. the U.S.)U.S. farmers today are harvesting 100 bushels more of corn per acre with about the same amount ofcommercial plant nutrients applied per acre as in 1970!1.7U.S. Nitrogen Use Efficiencyon CornU.S. Phosphate UseEfficiency on Corn0.9U.S. Potash Use Efficiencyon Corn0.91.60.81.51.40.71.21.11.00.90.80.7lbs K2O per Bulbs P2O5 per Bu1.3lbs N per Bu0.80.60.50.40.60.50.40.30.70.30.20.6Source: USDASource: USDA0.5708090001020Source: USDA0.10.27080900010207080900010209
Grain and oilseed demand remains strong and tight agfundamentals support nutrient demandThe Food Story remains intact – The world will continue to need to plant more area and increaseyields to meet grain and oilseed demand.Mil Tonnes475450425400375350325300275250225200World Less China Grain and Oilseed ource: USDA0002040608Stocks101214161820Percent of Use Global G&O balance sheets are snug – S:U ratio dropping to 15.9% in 2020/21 (lowest since 2007/08). USDA’s forecast calls for the stocks-to-use ratio remaining low in 2021/22, even in the face of a projected 3% increase in harvest.10
Is 2008 an Analog forthe Current Market?11
Global P & K Demand Impact in 2008: High prices, stuffed channeland difficult grower economics impacted demand, notably KGlobal Phosphate ShipmentsMil Tonnes% Annual Mil TonnesKCl65-5%84%100%60%15%1%20%-5%-8%3525-8%% Annual GrowthGlobal MOP * NPS products included in this analysis are those with a combined N and P 2O5 nutrient content of 45 units or greater.-20%532010-60%12
Strong demand and supply constraints haveaccelerated P & K pricing momentum in 2021Phosphates: Supply limitations have accelerated pricingmomentum in 2021; still well below 2008 peak. /MT1,400Global DAP/MAP Benchmark Prices /MTPublished Spot Prices1,100DAP, NOLAMAP, NOLA1,000DAP, IndiaMAP, Brazil1,2001,000800Potash: Prices continued their upward trajectory in Q4 on tightmarket conditions and uncertainty around Belarus sanctions.Published MOP Pricesc&f SE Asia900Potash price moves in 2021:800 Phosphate prices in 2021: NOLA DAP 374/ tonneNOLA MAP 355 / tonneBrazil MAP 400 / tonneIndia DAP 438 / tonne600delivered Corn Belt700c&f BrazilBrazil 560 / tonneU.S. Midwest 455 / tonneSE Asia 373 / tonne600500400400200300Source: Argus; Green MarketsSource: Argus; Green Markets, Fertecon, ICIS0Jan '07 Jan '09 Jan '11 Jan '13 Jan '15 Jan '17 Jan '19 Jan '21200Jan '07Jan '09Jan '11Jan '13Jan '15Jan '17Jan '19Jan '21*weekly average reported spot pricing for prompt deliveryData through November 18, 202113
Affordability index may appear to be signaling a yellow flag But net farmer returns are expected to remain constructivePlant Nutrient AffordabilityPlant Nutrient Price Index / Crop Price Index1.60 per acreFarmer Return in Central Illinois(High-productivity farm)5001.50Sources: University of Illinois, USDA, CBOT, 00.600.50Data through November 18, 2021-100Sources: Weekly Price Publications, CME, USDA, AAPFCO, Mosaic0.4005 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21Affordability MetricDemand was not meaningfullyimpacted by affordabilityAverage (2010-present)Key ‘22F Assumptions Retail fert. prices: DAP ( 860/ST), MOP ( 815/ST), ammonia ( 1,340/ST) Seed, chemicals and other variable costs up 20% (higher for chems /lower for seeds) Corn price ( 5.54/bu); Yield (comparable to 2021)14
Commodity prices have not declined as they did in 2008New Crop Corn Price /bu908/09 forecasted stocks:useincreased from 5% to 9% (Jun-Nov)82006-20092019-present21/22 forecasted stocks:useincreased from 9% to 10% (Jun-Nov)765409/10 forecasted yieldincreased 11 bu/acre32Source: CME1JanJul20062019Data through November 22, 2021Jan20072020JulJan20082021JulJan20092022Jul* “forecasted” refers tomonthly WASDE projections15
Global P&K inventories are notably tighter today thanthey were in late-2008India Q3 Stocks to Previous Yr.ShipmentsBrazil Q3 Stocks to Previous 0%10%8%15%6%10%4%5%2%0%0%MAPSource: ANDA, India Department of Fertilizers, MosaicMOPDAPMOP16
Economic conditions are very differentU.S. Real GDP Growth Rate6%5%Source: IMF (Oct ‘21 Forecast)2022F: 5.2%4%3%2%1%0%-1%-2%2009: -2.6%-3%-4%0708091011121314151617181920 21F 22F17
Nitrogen18
U.S. nitrogen fertilizer prices reaching 2008 highs asnatural gas prices spikeNitrogen-Based Fertilizer Prices /MT1,000Ammonia, TampaUAN, NOLA /MMBtuUrea (granular) , NOLASource: Argus800European Natural Gas Futures PricesDutch TTF4540Source: NYMEX35306002520400151020050Jan '07Jan '09Jan '11Data through November 18, 2021Jan '13Jan '15Jan '17Jan '19Jan '210Jan '20 Apr '20Jul '20Oct '20 Jan '21 Apr '21Jul '21Oct '21Data through November 22, 202119
Ammonia supplies are down as a result of the highnatural gas prices2021 European Ammonia manyNetherlandsUkraineShutdownCutbacksMaintenance OperatingMore than half of the 18mmt ofEuropean ammonia capacityhas been impacted by highnatural gas prices.Source: CRU; Mosaic-1,0002,0003,0004,0005,0006,000Thousand MT20
Nitrogen Factors to Watch Farmer Economics Natural Gas Production / Prices Rising costs keep demand growth subdued, but significantdemand destruction is not likely under current farmer economics. Chinese urea production and exports, Indian policies & importsCoal / Natural gas pricesEnvironmental regulationsDomestic nitrogen demandExport policyMil TonnesThousands Winter temperatures and resumption of drilling activity will be keyfactors to watch regarding forward ammonia production andnitrogen fertilizer prices1.6 /MM Henry Hub Natural GasDaily Close of Front MonthBtuContract7.0China Urea ExportsMin/Max Range (16-20)20216.07-Yr Olympic Average250Source: The American Gas & Oil2005.01504.01.2U.S. Gas Rig Count(Baker Hughes)3.01002.00.8501.0Source: NYMEX0.40.0Jan '18 Jan '19 Jan '20 Jan '210Jan '18 Jan '19 Jan '20 Jan '210.0JanFebMarAprMayJunJulAugSepOctNovDec21
Phosphates22
Global Phosphate DemandGlobal Phosphate ShipmentsMil TonnesDAP/MAP/NPS/TSP8075 - 787570 2021 global phosphate shipments areestimated to dip slightly to less than 76mmt,primarily on meaningful declines from Chinaand India (which sets the stage for a lift frompent-up demand in 2022). Our preliminary forecast for 2022 notedearlier this month calls for flat to moderatelyhigher shipments to a range of 75-78mmt, asa recovery of shipments in China and India ispartially offset by our conservative stance offlat to slightly lower shipments in some 22F* NPS products included in this analysis are those with a combined N and P 2O5 nutrient content of 45 units or greater. Very limited new capacity developmentsover the near term is expected to keep themarket tight.23
Phosphate Factors to Watch Farmer Economics India Subsidies Rising costs keep demand growth subdued, but significantdemand destruction is not likely under current farmer economics. Current headline subsidies are insufficient to bring producers orimporters into the black. Inventories are critically low and thereis notable pent-up demand. A key factor in 2022 will be to whatextent India raises subsides and/or the MRP. Raw Material Costs Ammonia prices are expected to remain elevated through Q1 ‘22as winter months keep natural gas prices strong. Sulphur alsoseeing upward pressure on strong demand.Ammonia /MT1,000900Raw Material Pricesc&f TampaAmmoniaSulphur /LTMil TonnesIndia DAP Inventory7.0500SulphurSource: 001001.0100500.0Mar-1900Jan-07 Jan-09 Jan-11 Jan-13 Jan-15 Jan-17 Jan-19 21Sep-21Data through Nov. 18, 202124
Phosphate Factors to Watch China Production and Exports U.S. imports China’s total phosphate production is being negativelyimpacted by energy consumption restrictions, and ongoingshifts to industrial phosphate production. It is expected that the export CIQs will limit phosphate exportsthrough at least Q1. Strong demand in the U.S. attracted a more diversified supply base. 2021 U.S. phosphate imports through mid November 2021 were upalmost 1.6 Mt (75%) over YTD 2020, but the pace of imports hasslowed sharply due to higher netbacks achievable elsewhere.U.S. Offshore Phosphate ImportsChina Phosphate ExportsMil Tonnes(DAP/MAP/NPS/TSP)Mil Tonnes1.45.0Sourced: China Customs, Mosaic1.24.03.0Morocco & Russia% of 2019 10.1mmtQ22020 9.3mmtQ3Q42021 ia 3 Oct &NovMTD20202021* Includes U.S. imports destined for Canadian markets.November MTD includes data through 11/15.25
Potash26
Global Potash DemandMil TonnesKClGlobal MOP Shipments7569.5 – 72.57065 We maintain our forecast for globalMOP shipments in 2021 at 70mmt,as downward revisions of China andIndia were offset by higher forecastsfor SE Asia and North America. Our preliminary forecast for 2022calls for 1.5% growth, primarilydriven by our cautious view onrecovery in China and India andcontinued growth in SE Asia.60555045101112131415161718192021E22F Higher Canadian production couldbring better balance to the market,but could be offset by the impact ofBelarus sanctions.Source: IFA, CRU, TFI and Mosaic27
Potash Factors to Watch Farmer Economics Palm Oil Prices & SE Asia Demand Rising costs keep demand growth subdued, butsignificant demand destruction is not likely under currentfarmer economics. Labor and other COVID-related restrictions kept MOP importssubdued in 2020. While MOP imports rebounded in 2021, verystrong palm oil prices should push demand even higher in 2022. Belarus Sanctions & Potential Expansions India Subsidies Our current base case is that sanctions will notmeaningfully impact Belarusian potash exports – the riskto that assumption is asymmetric to the downside (lowerexports).Belarus MOP ProductionMil TonnesKCl As with phosphates, MOP stocks are critically low and there issignificant pent-up demand. Future government subsidy and MRPrates will play a key role in future India MOP imports and n Palm OilDaily Close of Front MonthContractMilTonnes3.0India MOP 22,00001,500Jan '15Source: CRB1011121314151617181920 21FJan '170.0Jan '19Jan '21Sources: company reports, IFA, CRU and MosaicData through Nov. 22, 202128
Thank You!Questions?Chemicals for the Non-ChemistPlant Nutrients and PlantNutrient MarketsCiti Basic Materials ConferenceNovember 29, 2021Andy J. JungVP, Market and Strategic Analysis29
Appendix30
Primary Nutrient Overview: Nitrogen (N) Production process: Energy intensiveHaber-Bosch process to synthesizeammonia (NH3) from: Inert atmospheric N H that istypically sourced from hydrocarbonfeedstock ( 3/4 is natural gas) 2021 global use estimates Global Ammonia Production(Fertecon)About 192 million tonnes ammoniaproduced, with 75% used forfertilizersAmmonia Production 2021FChinaRussiaUSAEuropeIndiaIndonesia0Source: Fertecon204060Mil Tonnes31
Key 2021 Nitrogen Trade Flows (Urea)World Urea ImportsWorld Urea ExportsIndiaRussiaBrazilQatarUnited StatesEgyptAustraliaChinaTurkeySaudi IndonesiaFranceUAE0Source: CRU36912Million MTTop 10 countries represent 63% of imports0.0Source: CRU2.04.0Million MT6.08.0Top 10 countries represent 79% of exports32
Primary Nutrient Overview: Phosphorus (P) Production process – making phosphoruswater soluble Key inputs: phosphate rock mineral ore,sulphur and ammoniaGlobal Phosphate Rock Production Intermediate product: phosphoric acid (formost products) 2020 global use estimates (CRU) Ag: 87% of total Feed/Industrial: 13% of totalPhosphate Rock Production 2020FChinaMoroccoUSARussiaJordan0Source: CRU20406080100Mil Tonnes33
Phosphate Fertilizer Producers Top 102020Top 10 World's Largest Phosphate ProducersOCPMosaicPhosAgroYuntianhuaGuizhou PhosphateMa'aden (excl. 014.016.0Million Tonnes DAP-EquivalentSources: Company reports, IFA, CRU, and Mosaic estimates34
Forecast Key 2021 Phosphate Trade Flows (DAP/MAP/TSP)World DAP/MAP/TSP ImportsWorld DAP/MAP/TSP ExportsBrazilChinaIndiaMoroccoUSASaudi liaMexicoBangladeshIsrael0.0Source: CRU2.04.06.08.010.0Mil Tonnes DAP-equivalentTop 8 countries represent 66% of imports0Source: CRU246810Mil Tonnes DAP-equivalentTop 8 countries represent 91% of exports35
Primary Nutrient Overview: Potassium (K) Production process: separation processes withno chemical reaction Global MOP ProductionFor sylvinite ore, KCl typically is separated fromNaCl using flotation Key input: potash mineral ore Shaft mines: 70% productionSolution mines: 4% of productionSurface brines: 26% or production 2020 global use estimates (CRU) Ag: 92% of demand Industrial: 8% of demandMOP Production 2021FCanadaRussiaBelarusChinaIsrael0Source: CRU510152025Mil Tonnes KCl36
Key 2021 Potash Trade Flows (MOP)World MOP ImportsWorld MOP ile02Source: CRU*includes Canada to U.S. trade468101214Mil Tonnes KClTop 8 countries represent 73% of imports0Source: CRU*includes Canada to U.S. trade5101520Mil Tonnes KClTop 8 countries represent 99% of exports37
Plant nutrients are plant food (and common chemical elements) 17 chemical elements are required for plant growth N-P-K: the carbohydrates-protein-fat in a plant's diet Growing importance of secondary nutrients and micronutrients, especially in high yield systems Each plant nutrient product is identified by three numbers,
May 02, 2018 · D. Program Evaluation ͟The organization has provided a description of the framework for how each program will be evaluated. The framework should include all the elements below: ͟The evaluation methods are cost-effective for the organization ͟Quantitative and qualitative data is being collected (at Basics tier, data collection must have begun)
Silat is a combative art of self-defense and survival rooted from Matay archipelago. It was traced at thé early of Langkasuka Kingdom (2nd century CE) till thé reign of Melaka (Malaysia) Sultanate era (13th century). Silat has now evolved to become part of social culture and tradition with thé appearance of a fine physical and spiritual .
On an exceptional basis, Member States may request UNESCO to provide thé candidates with access to thé platform so they can complète thé form by themselves. Thèse requests must be addressed to esd rize unesco. or by 15 A ril 2021 UNESCO will provide thé nomineewith accessto thé platform via their émail address.
̶The leading indicator of employee engagement is based on the quality of the relationship between employee and supervisor Empower your managers! ̶Help them understand the impact on the organization ̶Share important changes, plan options, tasks, and deadlines ̶Provide key messages and talking points ̶Prepare them to answer employee questions
Dr. Sunita Bharatwal** Dr. Pawan Garga*** Abstract Customer satisfaction is derived from thè functionalities and values, a product or Service can provide. The current study aims to segregate thè dimensions of ordine Service quality and gather insights on its impact on web shopping. The trends of purchases have
Bruksanvisning för bilstereo . Bruksanvisning for bilstereo . Instrukcja obsługi samochodowego odtwarzacza stereo . Operating Instructions for Car Stereo . 610-104 . SV . Bruksanvisning i original
Chính Văn.- Còn đức Thế tôn thì tuệ giác cực kỳ trong sạch 8: hiện hành bất nhị 9, đạt đến vô tướng 10, đứng vào chỗ đứng của các đức Thế tôn 11, thể hiện tính bình đẳng của các Ngài, đến chỗ không còn chướng ngại 12, giáo pháp không thể khuynh đảo, tâm thức không bị cản trở, cái được
10 tips och tricks för att lyckas med ert sap-projekt 20 SAPSANYTT 2/2015 De flesta projektledare känner säkert till Cobb’s paradox. Martin Cobb verkade som CIO för sekretariatet för Treasury Board of Canada 1995 då han ställde frågan
