CF工业2026年第三季度业绩电话会：调整后EBITDA达8.33亿美元

核心要点

• CF工业共实现约30亿美元调整后EBITDA（2026年前九个月）。第三季度调整后EBITDA为8.33亿美元，归属于普通股股东的净利润为4.36亿美元，合稀释每股收益2.87美元。
• 可利用合成氨产能的运行达到了97%的利用率（年初至今）。该公司还完成了近200万吨UAN的第三季度发运，创下近十年来最高单季UAN发运量。
• 过去12个月的经营活动现金流约为31亿美元，而自由现金流达到约20亿美元。管理层表示，过去五年中，EBITDA向自由现金流的转化率平均约为60%。
• 管理层预计全球氮肥供需平衡在进入2027年后仍将保持建设性态势。CF工业估计，中东局势的扰动已导致约900万公吨尿素供应退出市场，同时超过35%的欧洲合成氨产能处于受限削减状态。
• CF工业维持了其2026年约13亿美元的综合资本支出预期，其中约9.5亿美元归属于该公司。
• 目前的增长型项目预计到2030年将为周期中期预估EBITDA贡献4亿美元，使其从29亿美元提升至33亿美元。结合现有的股票回购授权，管理层预计这些举措将使每股氮产量到2030年提高15%。

关键财务数据

业务与经营业绩

CF工业将业绩归功于高资产利用率及其低成本的北美生产网络。自2026年初以来，可利用合成氨产能的运行利用率达到97%，过去12个月的可记录事故率降至每20万工作工时0.1起事故。

北美地区的需求在第三季度有所增强。管理层表示，秋季合成氨项目的参与度非常高，若天气允许，施用量有望跻身过去10年的最高水平之列。UAN补库项目支撑了该季度近200万吨的发运量，公司表示其订单已排至2027年第一季度。

全球方面，CF工业表示北美、南美、欧洲和东南亚的氮肥库存均处于低位。预计印度将在2026年进口超过1000万公吨尿素。受信贷限制影响，巴西的采购节奏有所放缓，管理层估计该国的尿素需求可能比2025年减少约100万吨。

地缘政治和能源相关的中断继续制约着供应。包括阿曼在内的中东尿素出口量预计约为每月80万吨，而正常水平为150万至170万吨。管理层表示，即便冲突立即停止，恢复正常也可能需要4到6个月。

欧洲生产商继续面临高昂的天然气成本，预计该地区超过35%的合成氨产能已被削减。中国批准的尿素出口配额总量接近900万吨，而上年同期略低于500万吨，但管理层表示，这些出口并未从实质上缓解全球供求偏紧的局面。

CF工业还报告称低碳产品业务活动日益增加。管理层表示，平均溢价略高于每吨20美元（主要针对合成氨），同时UAN认证工作正在推进。

管理层展望

管理层预计，在递延需求、低库存以及全球供应受限的支撑下，氮肥价格至少在2027年上半年之前都将保持积极走势。该公司还预计，到2030年氮肥供需环境将保持结构性紧平衡，因为在建产能可能无法抵消需求增长以及预期的永久性停产。

对于2027年美国种植季，管理层预计目前玉米种植面积在9500万至9600万英亩之间，且视农作物价格可能还会进一步增加面积。此为管理层的市场预估，而非公司的财务指引。

Blue Point One合成氨工厂的建设进展符合预期。预计总成本维持在37亿美元不变，合成氨预计将于2029年投产。公用设施的预估成本仍为5.5亿美元，CF工业持有其余投资40%的权益。

亚祖城（Yazoo City）工厂方面，管理层预计装置重启进程将在2027年上半年启动，合成氨装置有可能略微提前。硝酸铵生产预计将于2027年下半年恢复。此外，亚祖城独立的碳捕集与封存（CCS）项目正在稳步推进，预计将于2028年投入运行。

风险与关注事项

• 中东地区的敌对行动继续制约生产、可用运力及贸易流动。货运与保险成本居高不下，工厂的运营状况难以评估。
• 欧洲氮肥生产仍面临天然气价格高企且剧烈波动的风险。管理层表示，长期停产限产可能会加速永久性关停。
• 中国的出口政策依然取决于保障国内粮食安全的优先原则，使得未来的尿素出口量充满不确定性。
• 巴西面临信贷紧缩以及与预测的强厄尔尼诺现象相关的潜在天气风险，这可能会对化肥采购和农作物单产造成不利影响。
• 秋季合成氨施肥仍高度依赖天气，美国玉米带部分地区的潮湿天气和偏高气温已导致施肥作业有所推迟。
• 非天然气成本受到英国业务外购合成氨、亚祖城工厂固定成本分摊吸收，以及分销与物流费用增加（包括运输方式由驳船转向铁路）的影响。

分析师问答亮点

管理层表示，欧洲氮肥装置关停的时间可能比此前预期提前12至18个月，因为长期停产会增加维护、重启和固定成本负担。

在产品定价方面，公司预计随着北半球需求的复苏，尿素价格将走强。UAN需求保持坚挺，而受欧洲限产和进口需求增加推动，合成氨价格涨势更为强劲。

关于种植户的收益状况，管理层表示，尽管农作物价格承压，氮肥采购依然保持韧性。管理层指出，秋季合成氨的高参与度、UAN订单以及每蒲式耳4.75美元的农作物收入保障价格均为支撑因素。

关于印度，管理层预计2027年尿素进口量将保持在约600万至900万吨的区间内。若国际天然气价格致使其国内生产缺乏经济效益，进口量可能会达到该区间的上限。

管理层认为，近期公布的美国模块化合成氨项目规模相对较小，通常在5万至15万吨之间，而Blue Point One的最低规划产能为150万吨。管理层预计这些项目不会从实质上改变更广泛的供应平衡格局。

财报电话会议完整实录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good day, ladies and gentlemen, and welcome to CF Industries' First 9 Months and Third Quarter of 2026 Conference Call.

[Operator Instructions]

I would now like to turn the presentation over to the host for today, Mr. Martin Jarosick with CF Investor Relations. Sir, please proceed.

Martin Jarosick

Good morning, and thanks for joining the CF Industries earnings conference call. With me today are Chris Bohn, President and CEO; Bert Frost, Executive Vice President and Chief Commercial Officer; and Andrew Scribner, Executive Vice President and Chief Financial Officer. CF Industries reported its results for the first 9 months and third quarter of 2026 yesterday afternoon. On this call, we'll review the results, discuss our outlook and then host a question-and-answer session. Statements made on this call and in the presentation on our website that are not historical facts are forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.

Therefore, actual outcomes and results may differ materially from what is expressed or implied in any statements. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available on our website. Also, you'll find reconciliations between GAAP and non-GAAP measures in the press release and presentation posted on our website. Now let me introduce Chris Bohn.

Christopher Bohn

Thanks, Martin, and good morning, everyone. Yesterday afternoon, we reported results for the first 9 months of 2026 in which we generated adjusted EBITDA of approximately $3 billion. Our results reflect the strength of CF Industries' operational performance and the structural advantages of our business. At the foundation of that performance is our team's relentless focus on safety excellence. We closed the quarter with a trailing 12-month incident rate of 0.1 incidents for 200,000 hours worked, well below industry averages. That outstanding safety performance directly supports reliable production and high asset utilization.

Since the beginning of the year, we have operated our available ammonia capacity at 97% utilization. Along with our consistent operational performance, we benefit from the structural advantages of our low-cost, low-risk North American asset base. Our low-cost position on the global nitrogen cost curve supports our current $2.9 billion mid-cycle EBITDA estimate, while our low-risk network provides upside during periods of global nitrogen market disruption. We have seen that dynamic play out this year with adjusted EBITDA through the first 9 months already exceeding our mid-cycle.

Together, these strengths translate into strong cash generation. CF Industries consistently convert approximately 60% of EBITDA into free cash flow. The highest rate in the materials sector and well above other fertilizer companies. This gives us the financial strength to invest in high-return projects while returning capital to shareholders. Today, we are making tangible progress on investments to grow our advantaged network and enhance margins. Blue Point One began site construction in August. Donaldsonville CCS is operating well and the Yazoo City CCS project is progressing towards start-up in 2028. We expect these projects to add $400 million to our mid-cycle EBITDA estimate by 2030, bringing it to $3.3 billion.

Further out, we have begun a FEED study for our Courtright diesel exhaust fluid project. Alongside those investments, we have returned $1.3 billion to shareholders over the last 12 months through share repurchases and dividends. Over that period, we have repurchased approximately 6% of our outstanding shares bringing total repurchases over the last 3 years to 22% of outstanding shares.

Taken together, our structural advantages, operating performance, growth investments and disciplined capital allocation position us to build on our track record of compounding value for long-term shareholders. With that, I'll turn it over to Bert to discuss the global nitrogen market environment. Bert?

Bert Frost

Thanks, Chris. The global nitrogen market environment remained constructive through the third quarter. Demand strengthened as the quarter progressed, while supply remained constrained. Buying activity accelerated in North America, South America and Europe as deferred demand returned to the market. Corn and wheat value strengthened during the third quarter before giving back some of the gains in the fourth quarter. At the same time, nitrogen values remain below the peaks reached during spring applications. We saw that demand pick up clearly in North America. Participation in our fall ammonia program has been very strong.

Weather permitting, we expect fall ammonia volumes to be amongst our highest in the last 10 years. Our UAN fill program also helped us ship nearly 2 million tons in the third quarter, our largest quarterly UAN volume this decade. Globally, demand also remains robust. India has maintained a steady pace of urea tenders, and we expect imports to exceed 10 million metric tons this year. Brazil has been slower to purchase in part because of credit constraints. However, improved crop values in the third quarter supported farmer economics and demand there. With nitrogen inventories low across the global system, including North America, South America, Europe and Southeast Asia, we believe substantial purchasing remains ahead.

On the supply side, geopolitical disruptions remain a significant factor. Since hostilities began in the Middle East in late February, we estimate that the global market has lost approximately 9 million metric tons of urea supply. Shipping availability and significantly higher freight and insurance costs remain constrained. Russia is another source of uncertainty. While production levels and plant availability are difficult to assess, disruptions in the Black Sea shipping lanes have affected traditional routes.

At the same time, high-cost producers remain under pressure. European producers faced challenging economics from high natural gas prices. We believe more than 35% of ammonia capacity in the region is curtailed. Additionally, natural gas availability continues to constrain production in other regions.

Chinese urea exports are helping to fill part of the global supply gap, particularly into India but have not materially loosened the global nitrogen supply-demand balance. We expect the Chinese government to continue to manage export levels in line with its domestic food security policies. Against this backdrop, we expect the global nitrogen supply-demand balance to remain constructive into 2027. Purchasing activity that was delayed earlier this year is now being realized. Global inventories remain low and meaningful portions of global production and trade remain constrained.

Longer term, our outlook has not changed. Nitrogen capacity currently under construction is not sufficient to meet global nitrogen demand growth and expected permanent shutdowns through 2030. Additionally, the timeline and capital costs required to bring future capacity online have become longer and more challenging. This supports a structurally tighter global nitrogen environment through the end of the decade and reinforces the value of CF Industries' low-cost, low-risk North American production and distribution network.

With that, I'll turn the call over to Andrew.

Andrew Scribner

Thanks, Bert, and good morning, everyone. For the first 9 months of 2026, the company reported net earnings attributable to common stockholders of approximately $1.8 billion or $11.60 per diluted share. EBITDA and adjusted EBITDA were both approximately $3 billion. For the third quarter, net earnings attributable to common stockholders were $436 million or $2.87 per diluted share. EBITDA was $822 million and adjusted EBITDA was $833 million. We continue to convert EBITDA into free cash flow at a consistently high rate.

Our trailing 12-month net cash from operations was approximately $3.1 billion, and free cash flow was approximately $2 billion. As you can see on Slide 9, our EBITDA to free cash flow conversion has averaged approximately 60% over the last 5 years. Conversion over the last 12 months has been slightly lower due to $306 million of deposits related to historical U.S.-Canada transfer pricing matter dating back to 2012. These deposits limit the accrual of additional interest in Canada, while the matter is resolved between the 2 governments.

Following resolution, we expect to file amended U.S. federal and state tax returns seeking refunds of related taxes previously paid. Looking ahead, our 2026 consolidated capital expenditure outlook remains approximately $1.3 billion with CF Industries' share at approximately $950 million.

Construction on the Blue Point One ammonia plant is moving forward in line with our expectations. The projected total cost remains $3.7 billion with ammonia production expected to commence in 2029. The cost of Blue Point common facilities also remains our initial estimate of $550 million. Our 40% share of the remaining investment in Blue Point One will be spread over 3 years is manageable given our consistently strong free cash flow generation. At the same time, we continue to return substantial capital to shareholders.

During the third quarter, we repurchased 3 million shares for approximately $367 million. As we discussed last quarter, we believe the market continues to drive too much of our earnings and free cash flow performance to short-term geopolitical factors. The structural advantages as Chris discussed, combined with the global nitrogen supply-demand dynamics Bert outlined, underpin our confidence in CF Industries' mid-cycle earnings power. We do not believe our earnings power is fully reflected in our valuation, supporting our continued opportunistic share repurchases. With that, I'll hand it back to Chris before we open the call for Q&A.

Christopher Bohn

Thanks, Andrew. I want to thank CF Industries employees for their outstanding performance through the first 9 months of 2026. Our team is operating safely and executing exceptionally well while navigating significant disruption in the global nitrogen market. We are especially proud of our team's commitment to safety excellence. Our recordable incident rate at the end of the quarter was the lowest we've ever achieved as a company, a testament to our employees living our Do It Right culture every day. That commitment was also on display in this year's Wilson Award for Safety Excellence. Our Medicine Hat complex earned this year's award, and I want to recognize that team, along with all of our finalists for the innovative approaches to safety they developed and shared. As you've heard today, structural changes in the global nitrogen market are reinforcing the value of CF Industries low-cost, low-risk North American asset base.

Combined with our consistent operational execution, differentiated sales and distribution capabilities and industry-leading free cash flow conversion, we have a strong foundation for long-term shareholder value creation. We are building on that foundation today through disciplined growth investments and capital returns.

As you can see on Slide 10, our current growth projects, combined with our existing share repurchase authorization are expected to increase nitrogen per share by 15% by 2030. These initiatives build on our long track record of compounding value and leave us well positioned to continue to create value for long-term shareholders. With that, operator, we'll open the call to questions.

Operator

[Operator Instructions]

The first question comes from Kristen Owen of Oppenheimer.

分析师问答

Kristen Owen

I just wanted to start with, sort of, your long-term supply outlook. You called out the 37% of European nameplate capacity that's currently curtailed. Just given the volatility in energy prices, never mind the absolute cost challenges. Like what's the structural settling out point? And has your view on the long-term supply backdrop changed?

Christopher Bohn

Kristen, I would say our view has not changed. I think it's something that we've been talking about for quite a while. The only part that has changed -- our view, I should say, in the aggregate, hasn't changed, is we believe it's going to accelerate from what we thought was a 2030 time frame with some of those European shutdowns to occur whether it be 12 months or 18 months sooner than that given the current dynamics that you discussed in the energy volatility. So today, we're seeing like you said, close to 40%, either offline or curtailed in Europe. And additionally, each quarter that this goes on makes it more and more challenging to start up that equipment because the capital cost that would be associated and additionally, to have fixed overhead absorption that continues and the work that's needed to keep that equipment in line to be started up at some unknown date is quite expensive.

So I would say our position on the tightening in the global S&D market has been one that we have back all the way to 2025. It's just being accelerated now. That's also being compounded by what we're seeing in Russia and Ukraine with no true resolution there. And I would even say what we're seeing in the Middle East even if there is some sort of resumption, it will take a while in order for that supply to begin flowing again.

Kristen Owen

And my follow-up is for Bert, I think you said fall application demand among the highest in 10 years. It's been a pretty dynamic year from a commodity price perspective. Obviously, a pretty healthy crop this year, but just maybe some indications on how you're thinking about acreage in 2027 would be helpful.

Bert Frost

The positive implications or directions in our Fall ammonia program, which is one of the highest in 10 years. One, it has to -- weather, we always put in the caveat of weather dependent because we're just starting the program now. We're well through our movement in Canada, and that's moving down into the Dakotas, then we have to move into the Illinois, Iowa and Nebraska states. So right now, that's a little bit delayed just because of the wet weather and elevated temperatures. But the -- right, the indications are with that big program for Fall applications does lead to positive implications for corn planting in 2027.

And what we're looking at is probably in line with what the other recommendations or indications are from the other players, is 95 million to 96 million acres could be elevated depending on pricing. Right now, where corn is settling, one of the positive things for this year is and for farm revenue is a settling of the crop revenue guarantee programs at $4.75 per harvest, that will lead to, I think, some -- a nice floor for a farmer in today's economics.

And then interesting to see what's going to happen globally with yields due to, I think, some under-applications of nutrients around the world and what that does to stocks-to-use ratios and how that correlates then to demand, which we see as healthy in the ethanol and protein markets and then, therefore, drives price. And I would say the expectation is driving price for corn at least up in 2027, which could drive acreage even higher than the 95 or 96 that we're targeting today.

Operator

The next question comes from Andrew Wong of RBC Capital Markets.

Andrew Wong

Just curious your thoughts on how you see the setup on nitrogen in the market today when you compare it to where we were last year. It seems like we're in a tighter situation with a lot of things you mentioned, higher energy prices. We also see stronger crop prices. When you look at nitrogen prices and like, I think, in aggregate, they're maybe only like 10% higher from where we were last year at this time. Like what's your thoughts on that? And why do you think that is?

Bert Frost

Yes, I think you're correct. In terms of your 10%, we are trading in the high $380s -- probably $360 to $380s last year and today, trading at $430 for Q4 for a short -- that's on a short ton for NOLA. And I do see a positive market going forward. Just a lot of this demand that has been deferred is going to catch up and then you throw in like we've talked about a lack of supply and the first world countries that can pay and will pay as we go into the Northern Hemisphere planting and application seasons, we see a robust demand coming, and we're actually seeing that with orders for our UAN programs and urea as well. And so my expectation would be we're on a positive trajectory in at least the first half of 2027 for nitrogen pricing.

Andrew Wong

Okay. Perfect. And then maybe just between the different products, you look at urea, ammonia, UAN, and we've seen more strength in ammonia and UAN recently, which I think is more reflective of what you've been seeing on European nat gas, but then urea seems to have lagged a bit, right? Like why do you think that is? And do you expect some catch-up as well on that?

Bert Frost

When you look at the global market in urea, you're trading about 4.5 million to 5 million tons per month seaborne traded. And I think with the Chinese supply that has come in to kind of covering what has been lost from the Middle East, as I said in my prepared remarks, we've probably lost 9 million tons, and it's in our deck of what's been lost and what's been made up with different places. And so as we're trending into the back half of this year and in Q4, I think the market is just in pause as you transition from hemispheres to hemispheres and planting and applications and building of supply.

But inventories are low across the globe in our channel checks. And so I do see a positive movement for urea. UAN has been trading on a higher differential to urea at this time, and we're seeing solid uptake in the UAN program for 2027 as well. Ammonia globally is more impacted, you're correct, European demand and global demand for ammonia. As like Chris' comments mentioned, you're seeing curtailments and shutdowns and inability to source and that has driven ammonia up higher in recent weeks.

Operator

The next question comes from James Hooper of Bernstein.

James Hooper

How long do you think that the Northern Hemisphere farmer can wait before buying? I mean are they looking at events this week, thinking the Iran war might end and they can hold on for some time? Is that why pricing is only 10% higher than last year?

Bert Frost

Well, I think you're seeing some indications of actual stepping in and buying. Our UAN program from our retail friends has been sold down a lot to farmers. And so that's a product we've already shipped. And we talked about the ammonia program, has been sold down to farmers. And I think ours and the other suppliers in United States and Canada have also done and never had or have prepared a good program for fall, which indicates, again, farmer uptake.

We will launch our spring program for ammonia post the application season this fall, and I expect that to be well updated. I think where you've seen some cutbacks in P&K is a reflection of the higher prices for those products. But I think nitrogen is a very good value, and it's been reflected in purchasing. I think the slowdown, if you're taking the whole Northern Hemisphere and the slowdown in Europe is a reflection of just those natural gas costs and European producers of nitrogen, those prices are much higher than in North America.

James Hooper

And just as a follow-up, can you just expand a little bit more on where you see Chinese urea exports going? I mean it looks like this is the highest level in 10 years. But do you think this could be a new normal or just a one-off with helping India out effectively?

Bert Frost

There are 2 Chinas. There's the prilled urea producers and the granular urea producers. What has helped stabilize the market in India and Southeast Asia has been the prilled supply, which is generally not demanded in first-tier, first world markets like South America or the United States or Europe. And so if you extract the prilled supply out, I would say the granular supply out of China has probably given a balanced market at this point. So Chinese -- the export authorizations now total almost 9 million tons.

So it is higher. Historically, last year was just a little under 5 million tons. But again, on a strange year with the limits out of the Middle East, it would -- it made sense for China to open up a little bit more. But it is consistent with, I think, what China has focused on is their own food security and food production and supply of fertilizers to their farmers on an economic basis. And so I think that's the first focus for China and then excess has been exported, whether that's next year, 6 million, 7 million, 8 million, I won't project at this point.

Christopher Bohn

Yes. I think the other thing with China, you said it's their highest export in over 10 years. It would also require them to have their highest asset utilization over a decade. So I'm not so certain some of the 8 million to 9 million tons of export that Bert was talking about there don't move a little bit into early part of the next calendar year as well. And that's where maybe that bumps up against some of the domestic food supply constraints that they're looking at doing there. So a lot to keep our eye on with that. But it is -- it would be quite a bit for them to export before the end of the year here.

Operator

The next question comes from Joel Jackson of BMO Capital Markets.

Joel Jackson

I just want to get an update on Yazoo. And would you expect the level of insurance inflow from Yazoo to be similar in Q4 and Q1, let's say, as Q3 levels? That's the first question.

Christopher Bohn

Yes. So I'll let the numbers in the insurance part go to Andrew. But just on an overall update with Yazoo, our expectations are still that towards the end of the first half of next year that we will be starting up components of that plant. As you recall, we've idled the ammonia, the nitric acid and the AN plants there as we rebuild the AN supply. Additionally, we're looking at as part of that reconfiguration is building out some of the logistics and distribution attributes of the site to make it more flexible than what it's been in the past being able to serve more customers. So we're excited about that plant getting back in operation in the first half of next year. But I'll turn it over to Andrew. He'll talk through a little bit more of the timing of insurance payments.

Andrew Scribner

Yes, Joel. So the way that I would think about it is, I would take a longer view. I think when you look at both the capital build and the timing of when the cash payments will go out, at the end of this year and into next year relative to the insurance pieces, what we expect is that you are going to offset. So if you take a longer-term view and you, kind of, go through once we're complete with the rebuild and this is all wrapped up, we see that the 2 will largely offset. We're not trying to give guidance on what it's going to look like quarter-over-quarter. So -- but I would say feel assured that, that longer-term view will largely offset.

Joel Jackson

Okay. And then you're just a little bit of months into your partners into construction at Blue Point. Any observations or thoughts you want to share what you've learned so far about the project, things you're thinking about changing or any observations?

Christopher Bohn

Well, I would say we're in very early days related to that. But we have hit some significant milestones with receiving the permits that were required. There's significant civil work that's ongoing down there. Our long lead items have been ordered, and we're looking to begin our module work at the beginning part of next year.

I would say the learning is that I think we are fortunate we made the decision when we did on a timing basis. So we -- if you think about it, we made FID 18 months ago, but about 6 months prior to that, we had put in orders on electrical gear given we knew that to get in queue there was important. So we're really 2 years ahead on some of our ordering of equipment. And I would say if you were to announce a project today, and look to build a world-class plant of something as similar to that, no matter where it is globally, you probably would have an extension of the duration by 12 to 18 months in completion of that.

So I think the one thing that we're happy that we made was the decision when we did and also the preordering of some of that critical equipment prior to the start. Operator, we can move to the next?

Operator

The next question is Lucas Beaumont of UBS.

Lucas Beaumont

I just wanted to ask about the controllable non-gas costs. So they have been running up about $200 million year-to-date year-on-year, which is about a 12% increase. So I mean it's been choppy quarter-to-quarter that has generally been higher. Could you just kind of talk us through the drivers there and how you see that evolving into the fourth quarter and into next year?

Andrew Scribner

Lucas, this is Andrew. Let me kind of talk you through Q3 because I think what you'll see in Q3 was also consistent with Q2, and now I'll give you some context here. So if you look at Q3, our cost of sales were up 11%. If you tease out the impact of volume, it was up about 4%. You probably saw within the quarter, we had some gas favorability. But I know what you're focused on is kind of what are some of those offsets. There were really 3 things that were coming through there, and I'll kind of put them in materiality order. There's a couple of ones I want you to make connections on. So the biggest impact that we saw coming through was higher cost of purchased ammonia and this is largely in support of our U.K. operations. Just keep in mind, we benefit from higher ammonia selling prices. And so there's kind of an overall -- when you think about the overall P&L, that flows through our fixed costs, but it's not necessarily structurally disadvantageous to us in aggregate.

The second piece is fixed cost absorption. We do have puts and takes between timing of turnarounds of this year versus last year. But the net of what's coming through is the Yazoo City rebuild that we're doing and the fixed cost absorption coming through.

The other connection I want to make there is, I know it would be intuitive potentially to say, I'm going to tease out the impact of the insurance costs and just look at the fixed costs, but those 2 need to ride in tandem because that insurance recovery is in part to offset those higher fixed costs we're actually seeing coming through. And so I would kind of think about those 2 things together. And then the third bucket, which is probably the smallest of the 3, but it does have an impact is distribution and logistics. And there's 2 things happening within that.

One, you do have some mode mix, where we're seeing some shifting from more -- shifting from barge into rail. That's really a function of our order book, and we're really focused on our netback. But you do see some of those costs coming through from a mix standpoint. But you do see that's a little bit more sticky as you do see increases in rail itself and some fuel surcharges. But I think when you tease that out, what we've been seeing for the last couple of quarters, it's largely been the purchased ammonia and Yazoo City fixed costs flowing through has been the primary driver that you've been seeing come through. Hopefully, that helps.

Lucas Beaumont

Great. And then you said -- you mentioned that you've sort of seen Middle East and urea exports tracking at about half the levels they were previously sort of coming out of the region since the conflict began. How has that been trending over time? Are you -- is that improving? Is it slowing? Is it stable? And how do you, kind of, see the outlook there short of us getting a full resumption in open trade?

Bert Frost

So the Middle East has been a question of fairly opaque at first when hostilities began in late February and March, there are vessels that were tracked behind, unloaded or empty as well as loaded. That delayed months to get out. So there was a period of time when it kind of opened up and things moved in May and June and then obviously froze up again. And there's been a lot of vessels that have moved with transponders turned off. And so it's kind of difficult to track those. But outside of Oman, we're probably considering 500,000 to 550,000 tons per month has been exiting the Gulf and then throwing Oman on top of that because it sits outside the Gulf, you're probably around 800,000 tons out of 1.5 million to 1.7 million normally per month. Iran has been moving some tons but less than their previous capacities. And so when you consider that, you're probably losing close to 700,000 to 1 million tons per month out of the Gulf consistently.

How quickly that recovers is another question because of the risks and costs of going in and out of the Gulf today, it will take a long time not only to untangle what's there, but for vessels to reposition themselves to load and just the costs associated with freight. So if hostilities were to end tomorrow, I would think it would take months to get back to what is a "normal" volume. And then you've got to consider what -- which of those plants have not -- are inoperable or operating at a suboptimal rate due to some activities with drones or with inattention or maintenance. So I think those 2 or 3 things combined would say you're going to be 4 to 6 months if everything ended today.

Operator

The next question comes from Edlain Rodriguez of Mizuho.

Edlain Rodriguez

Just a philosophical question. So when you look at the overall ag complex, corn prices have been down sharply since the last WASDE report, whether it gets revised down or not next week, who knows? So farmers' income is under pressure. Like what do you think this is doing to farmers' psychology and their willingness to pay higher prices for crop inputs?

Bert Frost

Well, you have to start with the premise, that's the business that they're in is to plant the crop, harvest a crop.

Edlain Rodriguez

Farmers have to plant, yes.

Bert Frost

And so as coming from a farm family and with a lot of friends growing up in Kansas, that's just what you do. Now relative to cost, there has been a lot of money from the federal government in the 3 tranches to support farm income. And then from my earlier comment about the crop -- kind of the crop -- it's called the crop guarantee or revenue guarantee program with a minimum price set at $4.75 for harvest. That's much more attractive than where cash is today.

So you have another kind of form of support, but I do see with what's going on around the world, those farmers who have the ability to inventory or store their crops through a cycle, probably some good opportunities in the forward market relative to the impact of El Niño around the world, the impact of lower nutrient levels utilized for the crop that's being put in the ground and the stocks use ratios that are in the market relative to demand being strong with ethanol and protein production. So we've got some positives in line to support crop prices, which can therefore, support farmer income and that's a knock on wood.

Christopher Bohn

Yes. And I would just say from CF's perspective, the area that we focus on is providing as much supply as we can globally by our production, and that's operating our sites like we have at a utilization rate at 97%, making consistent investments over the year into those assets. So they're safe and have that high reliability that we can serve the farmer and then increasing production, whether it be through debottlenecks at our plants or even our distribution network in order to make certain that we can get the product to the farmer at the lowest cost and move it through the system when they need it for application. So our whole focus is really on the supply side of the S&D balance here in order to assist our end customer, the farmer.

Operator

The next question comes from Ben Theurer of Barclays.

Benjamin Theurer

A lot being talked about already on the supply side and obviously, the ups and downs here, but wanted to dig into one of the demand drivers, particularly Brazil and what you're expecting here for the next, call it, 1 to 2 quarters, trending behind on a year-to-date basis in terms of imports, but you still have, at least based on your presentation, a pretty sizable uptick into the fourth quarter. So given the volatility of Brazilian politics, the BRL, the corn price and so on as well as soybean prices. How confident are you about the level of potential uptake for urea in Brazil? That would be my first question.

Bert Frost

Yes, I think with the rally in Q3 that we saw in corn, if hedging had taken place at the $5 level was pretty attractive for second crop corn in Mato Grosso. So Safrinha gets planted generally late January through early March. But we are seeing -- it is a credit constrained issue with a lot of kind of carrying costs that the suppliers of nutrients have to have long-dated credit and getting repaid. That has delayed purchasing from the importers, which has delayed sales to the farmers. And so our estimates today is that for urea, Brazil would be down probably 1 million tons compared to 2025.

And overall, with NPK, probably down 7 million to 9 million tons of total fertilizer demand cut due to an inability to pay for it in terms of being competitive and again, these credit issues. But I think one of the overhangs of Brazil today is this super El Niño that all the weather prognosticators are predicting is the impact when it's dry, and you're planting at the tail end of the rainy season and does that come really impact yields, which would be a very difficult move for Brazilian farmer moving forward.

Benjamin Theurer

Okay. And then my follow-up question, maybe help us understand with this very big spread on gas prices and European being in the high 20s, almost $30 MMBtu, obviously completely out of money where the prices are. So why has that not driven higher prices globally just yet? Is it just because the demand is not there? Is it because of the supply from China? What is holding back a better pricing just given what the cost for the last producer, so to speak is versus what the cost for you guys is that has been very, very stable on a 9-month basis?

Bert Frost

I think you have seen a supply contraction with our estimates of 35% of European production is either shut down or curtailed and the impact then on ammonia, you've seen $100, $200 rally in ammonia prices and seeing North African as well as North America and ammonia moving towards Europe to supply those producers that can import ammonia and produce CAN or AN or UAN and so I think with what the supply constraint in Europe relative to the total global supply is lower. And I think you'll be seeing some deferred purchasing around the world that is also probably not impacted. Supply hasn't had to move into those positions yet. So when you combine demand deferral globally with prompt demand in Europe, I think that's why we're not escalating in price to the level that probably you would expect.

Operator

The next question comes from David Symonds of BNP Paribas.

David Symonds

Just a question on the announcement of some of these modular ammonia plants coming internally in the U.S. Do you have any view on where those guys might land on the cost curve and whether it impacts distribution margins or if it's just a move of removal of imports in favor of domestic production?

Christopher Bohn

Some of these discussions that are coming through are part of the FIELDS program that the USDA had with expanding production that the top 4 producers were not eligible to participate in. But a lot of those are very, very small. And you sort of question on scale, their efficiency and really their capital cost per ton that could happen. And then on some of the other announcements related to FIELDS you're looking at some pretty small debottlenecks. Things that we look at through our network all the time to increase efficiency.

And obviously, we believe given our technical expertise, we're going to do that on a lower cost per ton than anybody else. But in the end, those announcements, you're looking at sizes that are in the 50,000 to 150,000 ton ranking here where our Blue Point at minimum is going to be 1.5 million tons. So you're kind of just nipping around the edges from what it's going to do from the overall supply standpoint. And I think that just really touches why our view, both near, mid and long term is so constructive on nitrogen.

We're seeing demand, as Bert said, yes, there's some deferral, but it directly affects yield with the lack of nitrogen. So demand continues to grow, but we've seen not only what's happening with geopolitical, but European shutdowns occur, and then there's a lack of new supply being bid into the market and then add on top of that, as I mentioned earlier, the duration to start up a new plant is longer. So all of this even though we hear these announcements of these smallers are not moving the needle to the tightness we're seeing in the global S&D balance not only this year but over the next several years.

Operator

The next question comes from Vincent Andrews of Morgan Stanley.

Vincent Andrews

I want to come back to Yazoo for a moment. At this point, when you're talking about first half of '27. Does that mean at some point the complex will restart then? Or does that mean you think the ramp of the restart will be completed by the end of the first half. So any color you could provide on that would be helpful.

Christopher Bohn

Yes, Vincent, that's a good question. Really, we're seeing that as the ramp begin at that particular time, we'll maybe even slightly earlier than that as we start to bring up the ammonia plant, but then may take it down just given the amount of storage capacity. But obviously, this plant will have been down for basically about 1.5 years. So our intention is in the first half of the year, we're ramping it up, doing it safely, making certain that we have -- we're able to -- when the AN side is completely ready to go that we can move into AN production in the second half of the year. In addition to that, also as we're ramping it up, you'd be looking at some of the construction on that logistics flexibility that we're looking at, whether that be through DEF loadout, ammonia loadout, et cetera, would be part of that.

Vincent Andrews

Okay. And then for Bert, another question on China is slightly different, though. We saw -- I think it was last week, they're starting to put quotas on ammonium sulfate exports. So obviously, urea is up more than we all thought, but AS, which had been something that they let, kind of, run wild the last few years. Now they seem to be holding back on that. And any thoughts on what's going on there?

Bert Frost

That was a surprise. I think the -- on top of the amazing amount of ammonium sulfate that has gone out in the world, over 20 million tons and it's just been kind of a cheap replacement for urea, but I think it's related to sulfur and the cost of sulfur, the cost of production and the need for sulfuric acid for other applications and so that was just a tightening in a restriction of the ammonium sulfate to be produced or exported.

Operator

The next question comes from Chris Parkinson of Wolfe Research.

Christopher Parkinson

Ever since summer fill, you've undergone, for all intents and purposes, looks like very solid demand through the fall in terms of reactions to that program. And you've seen a continuation of that in the price on a quarter-on-quarter basis. How are you thinking about building order books in the spring and ultimately maxing your network on a net unit basis based on where prices reside at least today.

Bert Frost

When you look at the summer fill program, Mike and the team have done a great job putting that out in early July, and the roll up was very fast. We took over probably 2 -- over 2 million tons of orders and have been shipping against that. But -- and then in parallel, building the book through Q4 and now we're sold into Q1. And the pricing on that was, we started in the high like $280, $290 and you saw that reflected in the positive price of $322 as an average price for Q3, and that has continued to escalate. One is a reflection of just the need for nitrogen. Two is a reflection of the global market and kind of just, I think, a migration to UAN.

Parallel to that, we've exported a lot less of UAN and have kept a lot more one of our decision earlier in the year to keep tons for the North American farmer or the American farmer. And as we position for spring, I think we always compare between the nitrogen products and try to stay in relation, but we're seeing a very positive spring demand, I think coming again back to the corn acres that are going to be planted and applied as well as what we expect to have a better corn price for spring.

Christopher Parkinson

And just a quick follow-up, perhaps a slightly longer-term question. But a couple of years ago, India, there were very brief talks about India trying to be independent on urea side, which has been anything bought over the last 2 years. And obviously have, I'd say, disappointed in production, obviously, at periodic times over that frame. How are you kind of thinking about that market over the longer term in terms of market growth versus perhaps U.S. LNG contracts towards the end of this decade. Is that something where you're looking at it sustainably, let's say, in the high single millions in terms of the market, in terms of the import market? Do you see that declining slightly? Do you see it growing? Just trying to get, kind of, a grasp on how you're viewing the longer-term supply-demand dynamic based on them.

Bert Frost

Yes. So today, India is approaching 40 million tons of total consumption and production of around 30 and imports of around 10 million tons. So imports have ranged between 5 million to 10 million tons over the last several years. They have had a -- the Modi government has directed a Made in India program. They have built new plants. But those -- some of those that are gas supplied are expensive. So if you're paying the world price for natural gas today at $25 to $30 and you're competing against import urea, it makes much more economic sense to not operate those plants and import urea, especially from China, which is the cheapest source of -- and they're a big buyer of prilled urea.

So I would look at it in that range of -- there is a new plant coming on in 2027, about 1 million-ton plant in India that is slated to come into production. So I would make that range or think about that range in that 6 million to 9 million tons into 2027. And if gas prices are expensive, it should be on the high side.

Operator

The next question comes from Matthew DeYoe of Bank of America.

Matthew DeYoe

Yes. How are you seeing ammonia demand for phosphates transpire? Obviously, the last 6 months, 1 direction, but we're starting to see some capacity come back. So what do you expect there? And how does -- how do you think about the circular reference for price of ammonia and perhaps some of the ability for the phosphate players to actually restart?

Bert Frost

Yes. It's been a difficult road for the phosphate producers because of sulfur and the price of sulfur elevating to over $1,000 a ton as an ammonia supplier, and we do supply some of the major producers and have very good relationships with them and both contractually and spot tons we sell and through conversations with them, we're expecting demand for ammonia to increase in 2027 based on 2 drivers. One, we expect sulfur to come back in line, maybe not back to historical values yet, but trending that way as well as just overall demand for phosphates, which globally have been cut 20% or 30%. You've had under applications in all the major markets for phosphate and that, again, eventually will have a yield impact and then an ability then to pay for phosphate. So we're constructive, I think, in 2027, probably more positive going into 2028 for ammonia demand from the phosphate producers.

Operator

The next question comes from Salvator Tiano of KeyBanc Capital Markets.

Salvator Tiano

Yes. Firstly, you made a comment before some of the higher costs you incurred outside of gas were due to higher shipping costs, but you focus on the net back. And on that front, I wanted to understand a little bit with your Midwest corn belt ammonia operations. Can you talk to a little bit about what is -- what percent or what dollar amount of the spread between say NOLA ammonia price and Midwest is part of the cost of transportation and perhaps storage versus what's kind of the premium netback view as CF can get by having access to barges and storage network. And also, can you shed some light into what volume you ship to the corn belt kind of on an annual basis?

Bert Frost

So how we look at ammonia through the Midwest and the terminal system. We have our terminal distribution that is principally supplied by the Sunoco pipeline that starts in NOLA at our Donaldsonville plant and then intersects and then splits off into Indiana and Iowa up through Nebraska. And we ship about 1 point -- total ammonia for corn applications or wheat would be about 1.3, 1.4 for CF. And so then we stair-step the costs, the most economically advantaged ton is shipped by the pipeline, and we maximize our volume through that.

The next step is our barges, which we own and lease some and we move up to our river-served terminals and then some are served by truck that as we moved excess ammonia from maybe our Oklahoma system or extraneous tons from Courtright, Ontario into one of those facilities. That just balances it out. So that's your stair-stepping in costs from pipe to barge through truck and rail.

And yes, costs were up a little bit. But as Andrew said earlier, a lot of that is a reflection of the increased volume that we moved and then we expect to receive as those tons go out and are applied the revenue and the margin from that, which is also higher than our export or our industrial gas-based business.

Christopher Bohn

I think the real benefit is our unmatched distribution facility organization where we can keep all our plants running at high utilization rates, as we've shown year after year, and it's really because of the movements that Bert was mentioning from plant by plant to location by location to distribution facility by distribution facility that there's never any type of curtailment from our production network, given that our production network, it really dovetails directly into our distribution system.

Salvator Tiano

Perfect. And I wanted to ask also a little bit about low carbon ammonia. Can you refresh us firstly on where you stand with any sales commitments or volume commitments from Donaldsonville before, whether it's ammonia, urea and the premiums that we had first disclosed a year ago. And are you seeing any new markets gaining traction? It seems like there have been some ammonia-powered vessels now in the -- that have been manufactured? Are you seeing anything there or in the energy market incremental versus a few months ago?

Christopher Bohn

Yes. So I'll start with the first part of your question, Bert's team has done just a fabulous job of month-by-month building the low-carbon book that we have, and we're starting to see significant volume move through that. What I would say is probably an average price, a little over $20 per ton. And that was primarily focused on ammonia. We now have our certifications that we're working through on UAN. So we're beginning to see UAN come through that, not only because of the sequestration we're doing with the CO2 on the ammonia production side, but also our abatement projects on our nitric acid plants that we're seeing at a couple of our plants as well.

So that's a market that we just continue to see as really upside opportunity that once again, just demonstrates the differentiation between our network and others in our space and really the leadership that we're doing through the low-carbon network.

So we continue to build that book. Our expectation is next year with CBAM and some of the pending details on certification process getting worked out, we'll see that expand quite a bit more.

Operator

Our next question comes from Mazahir Mammadli of Rothschild & Company.

Mazahir Mammadli

Just a question on sort of high-level ag fundamentals. I'm curious to hear your opinion on the current crop price environment, do you think the current new crop futures reflect the reality on the ground in terms of what the yields could be -- could turn out for corn and other important crops.

Bert Frost

Regarding yield, we're almost an information taker as well. We do have our channel checks and different farmers we talk to. I am surprised by some of the farm yields or corn yields I'm hearing about in the northern tier, like in North Dakota on dry land as well as the irrigated performance in Nebraska and Kansas. But overall, I was surprised on the USDA's revision compared to Pro Farmer and some of the other information that came out. So whether we move from 181 average yield to 183, which is what's projected. But taking a step back and going from a global perspective, I do see a challenged market, again, weather-related nutrient, lack of nutrient related in South America, specific to Mato Grosso, is a potential for yield cuts there. I think Argentina is expected to have adequate rains and performance. So when you take a step back on where we are on demand, I would hope to see corn value start to rally as we get into 2027.

Operator

Ladies and gentlemen, that is all the time we have for questions for today. I would like to turn the call back to Martin Jarosick for closing remarks.

Martin Jarosick

Thanks, everyone, for joining us today and we look forward to seeing you at upcoming conferences.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.