CF Industries (CF)

Nitrogen on Cheap US Gas

CF Industries makes only nitrogen, from North American gas priced off Henry Hub, the US benchmark, so it is the cleanest read on what a low-cost nitrogen plant earns. CF reports in short tons of 2,000 lb, counting every product by its own weight. In FY2025 it sold 19.06M short tons of product and earned $2,893M of adjusted EBITDA, $152 a short ton or about $167 per metric tonne. It has no phosphate or potash.

Its gas cost $3.31/MMBtu (million British thermal units, the unit gas is priced in) in FY2025, on 352M MMBtu used. Yara, the Norwegian producer, paid a weighted $10.0/MMBtu across its plants and $13.2/MMBtu in Europe. That puts CF at the low end of the world nitrogen cost curve, the ranking of plants from cheapest to dearest, which the cost curve guide sets out.

CF files no cash cost per ton, so EBITDA per ton and gross margin per product ton stand in for one. CF says gas is more than 70% of the variable cost of making ammonia for many producers worldwide (Fertilizer Prices FAQ, March 2026). For its own plants it puts gas at 34% of total production costs in FY2025 (28% in FY2024), a wider base that includes fixed costs. The gas and nitrogen guide explains the difference.

How the Numbers Read

Adjusted EBITDA of $2,893M sits close to reported EBITDA of $2,776M. The adjustments are small. Both come after the share of earnings owned by CHS, a US farm cooperative with about 11% of CF's main US subsidiary. Net debt was $1,233M at 31 December 2025 (long-term debt $3,215M less cash $1,982M), or 0.43x adjusted EBITDA.

The selling price swings CF's earnings more than gas does. CF estimates that a $50 per short ton move in its realised urea price, applied in proportion to its other nitrogen products, changes adjusted EBITDA by about $800M a year; a $100 move, by roughly $1.6B. A $1/MMBtu move in gas on 352M MMBtu is about $350M a year. CF's estimate leaves out CHS's share and industrial contracts that already pass price and gas changes to the customer.

How You Would Value a Nitrogen Producer

Rebuild earnings at long-run urea and gas prices rather than putting a multiple on one year. That matters most for a nitrogen-only producer, because all of its EBITDA moves with one set of prices. CF realised $433 per short ton for granular urea in FY2025, about $477 per metric tonne; Middle East urea at the export port averaged $422.7/t in 2025. A US plant sells at US prices, which sit above the Middle East export price by roughly the cost of shipping urea to the US, and neither figure is a long-run price on its own.

The mid-cycle earnings guide works the method on fictional producers. The N/P/K guide sets CF's nitrogen-only business beside Nutrien's three nutrients plus retail and Mosaic's phosphate and potash.

What to Watch in the Financials

Gas cost against Henry Hub. CF paid $3.31/MMBtu in FY2025 while Henry Hub averaged $3.53 on the figure CF cites. The gap reflects the hubs CF buys at and its hedges, and it changes year to year.

Output. A plant outage cuts tons sold and spreads fixed costs over fewer of them, so EBITDA per ton falls whatever the price does.

Key Risks

One nutrient. A fall in nitrogen prices reaches all of CF's EBITDA; integrated producers also sell potash or phosphate.

The US gas advantage. It rests on Henry Hub staying well below European gas prices. More US LNG exports would tie Henry Hub more closely to world gas prices and narrow the gap.