Chemicals 2026 Outlook: Fertilizers
Andrew Brady - Head of Basics, CreditSights
Jarah Cotton - Analyst, Chemicals, CreditSights
10 December 2025
Insights into Chemicals 2026 Outlook: Fertilizers, including:
- Nitrogen oversupply pressures intensify: China’s elevated urea inventory drives aggressive export campaigns, creating pricing floors that undercut North American producers significantly.
- Phosphate affordability crisis persists: Meanwhile, high fertilizer prices constrain application rates as US farmers delay purchases with ratios at multi-year highs.
- Potash fundamentals remain constructive: However, global demand shows fourth consecutive year of growth as inventories normalize across major markets worldwide.
- Company strategy divergence widens: Additionally, CF focuses on blue ammonia transformation while Nutrien leverages retail diversification and Mosaic faces phosphate challenges.
- Credit quality migration recommended: Therefore, moving toward nitrogen-focused CF preferred over phosphate-exposed Mosaic as affordability concerns weigh on discretionary nutrients.
Executive Summary
CF Industries maintains Market perform while Mosaic moves to Underperform and Nutrien to Market perform. Grower affordability crisis fundamentally drives fertilizer demand outlook amid worsening cost pressures and margin constraints.
Additionally, North American farmers increasingly adopt cost-conscious practices by delaying purchases and negotiating for lower alternatives. These behaviors particularly affect phosphate and potash markets where affordability challenges drive strategic application changes.
Domestic nitrogen producers leverage natural gas cost advantages to maintain profitability despite intensifying competitive pressures. Meanwhile, Chinese exporters increase global tender presence, forcing Western producers to adapt strategies and defend share.
Urea demand remains resilient through favorable crop economics and supportive government policies in key importing regions. However, affordability concerns and price sensitivity prompt farmers to moderate application rates and manage inputs cautiously.
Phosphate demand stays subdued as farmers skip applications and rely on residual soil nutrients instead. Conversely, potash demand improves moderately in Asia while producers focus on margin management over volume growth.
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