Q2 2024 Mosaic Co Earnings Call
Speaker Change: Good morning, and welcome to the Mosaic Company's second quarter 2024 earnings conference call.
Unknown Executive: James Coference Call. At this time, all participants have been placed in a listen-only mode. After the company completes their prepared remarks, the lines will be open to take your questions.
Operator: At this time, all participants have been placed in a listen-only mode. After the company completes its prepared remarks, the lines will be open to take your questions. Your host for today's call is Jason Tremblay. Jason, you may begin.
Speaker Change: At this time, all participants have been placed in a listen-only mode. After the company completes their prepared remarks, the lines will be open to take your questions. Your host for today's call is Jason Tremblay. Jason, you may begin. Thank you, and welcome to our second quarter 2024 earnings call.
Jason Tremblay: Your host for today's call is Jason Tremblay.
Jason Tremblay: Thank you, and welcome to our second quarter 2024 earnings call. Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer, followed by a fireside chat, then open Q&A. Clint Freeland, Executive Vice President and Chief Financial Officer, and Jenny Wong, Executive Vice President and Commercial, will also be available to answer your questions. We will be making forward-looking statements during this conference call. We will also be presenting certain non
Bruce Bodine: Thank you, and welcome to our second quarter 2024 earnings call.
Bruce Bodine: Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer, followed by a fireside chat, then open Q&A. Clint Freeland, Executive Vice President and Chief Financial Officer, and Jenny Wong, Executive Vice President, Commercial, will also be available to answer your questions.
Speaker Change: Opening comments will be provided by Bruce Bodine, President and Chief Executive Officer, followed by a fireside chat, then open Q&A.
Speaker Change: Clint Freeland, Executive Vice President and Chief Financial Officer, and Jenny Wong, Executive Vice President, Commercial, will also be available to answer your questions.
Unknown Executive: We will be making forward-looking statements during this conference call. The statements include, but are not limited to statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties. Actual results may differ materially from projected results; factors that could cause actual results to differ materially.
Speaker Change: We will be making forward-looking statements during this conference call. The statements include, but are not limited to, statements about future financial and operating results. They are based on management's beliefs and expectations as of today's date and are subject to significant risks and uncertainties.
Speaker Change: Actual results may differ materially from projected results. Factors that could cause actual results to differ materially from those in the forward-looking statements are included in our press release published yesterday and in our report filed with the Securities and Exchange Commission.
Unknown Executive: We will also be presenting certain non-GAAP financial measures. Our press release and performance date have also contained important information on these non-GAAP measures.
Speaker Change: We will also be presenting certain non-GAAP financial measures. Our press release and performance data also contain important information on these non-GAAP measures. Now I'd like to turn the call over to Bruce.
Bruce Bodine: Now I would like to turn the call over to Bruce.
Bruce Bodine: Good morning. Thank you for joining us for our second quarter earnings discussion. Before we begin, I want to acknowledge that we have recently experienced some serious safety issues. We take safety extremely seriously, and we are working to further improve our culture to ensure our people go home safe after every shoot. Moving on to our earnings discussion. We're making good progress across our strategic initiatives, both to grow the company and manage costs, and our market outlook remains constructive. I'll start with the actions we're taking to strengthen the business for the long term. We are hyper-focused on managing costs, and we're making good progress across G&A, operating, and capital expenditures.
Bruce Bodine: Good morning. Thank you for joining our second quarter earnings discussion. Before we begin, I want to acknowledge that we have recently experienced some serious safety incidents. We take safety extremely seriously, and we are working to further improve our culture to ensure our people go home safe after every shift.
Bruce Bodine: Good morning. Thank you for joining our second quarter earnings discussion.
Bruce Bodine: Before we begin, I want to acknowledge that we have recently experienced some serious safety incidents.
Bruce Bodine: We take safety extremely seriously, and we are working to further improve our culture to ensure our people go home safe after every shift.
Bruce Bodine: Moving on to our earnings discussion. This morning, I will add some color to the information we published, and then we'll get to your questions. This was another solid quarter for Mosaic, both in terms of our results and our operational progress. For the quarter, Mosaic delivered adjusted EBITDA of $584 million on revenues of $2.8 billion, compared with adjusted EBITDA of $744 million in revenues of $3.4 billion a year ago. Adjusted earnings per share for the quarter were $0.54 compared with the dollar in 4 cents in 2023. We are making good progress across our strategic initiatives, both to grow the company and manage costs, and our market outlook remains constructive.
Bruce Bodine: Moving on to our earnings discussion.
Bruce Bodine: This morning I will add some color to the information we've published and then we'll get to your questions.
Bruce Bodine: This was another solid quarter for Mosaic, both in terms of our results and our operational progress.
Bruce Bodine: For the quarter, Mosaic delivered adjusted EBITDA of $584 million on revenues of $2.8 billion.
Bruce Bodine: Compared with adjusted EBITDA of $744 million and revenues of $3.4 billion a year ago, adjusted earnings per share for the quarter were $0.54 compared with $1.04 in 2023.
Bruce Bodine: We are making good progress across our strategic initiatives, both to grow the company and manage costs, and our market outlook remains constructive.
Bruce Bodine: I'll start with the actions we're taking to strengthen the business for the long term. We are hyper-focused on managing costs, and we're making good progress across G&A, operating in capital expenditures. Since the announcement of our $150 million expense reduction program between SG&A and cost control measures implemented in Brazil, we have already achieved more than one-third of the annual run rate cost savings target. This does not include phosphate fixed cost absorption resulting from higher production volumes in the second quarter. We have also executed phase one of our third-party contractor reduction plan for Brazil and expect to begin seeing the benefits in the second half of this year.
Bruce Bodine: I'll start with the actions we're taking to strengthen the business for the long term.
Bruce Bodine: We are hyper-focused on managing costs, and we're making good progress across G&A operating and capital expenditures.
Bruce Bodine: This does not include phosphate fixed cost absorption resulting from higher production volumes in the second quarter.
Bruce Bodine: We have also executed phase one of our third-party contractor reduction plan in Brazil and expect to begin seeing the benefits in the second half of this year.
Bruce Bodine: With several projects winding down and careful CAPEX management, we are on track to achieve our targeted $200 million reduction. and Capital Expenditure. Our work to improve our operations and driving operating efficiency is paying off. Vodstate production volume in the second quarter increased by almost 100,000 tons over the first quarter.
Bruce Bodine: With several projects winding down and careful CapEx management, we are on track to achieve our targeted $200 million reduction in capital expenditures.
Bruce Bodine: Our work to improve our operations and driving operating efficiency is paying off.
Bruce Bodine: Phosphate production volume in the second quarter increased by almost 100,000 tons over the first quarter.
Operator: Hello, I'm so sorry to interrupt. This is the conference operator.
Unknown Executive: So sorry to interrupt. This is the conference operator. This conference.
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James ORourke: www.larryweaver.com
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James ORourke: www.larryweaver.com
James ORourke: Unknown Executive, James ORourke
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Bruce Bodine: Biosciences business is making significant progress. In fact, we have launched our biological products in North America, Brazil, China, India, and nine other Central American markets. Our products are now in use on 5 million acres in North and Central America, which highlights the competitive advantage our brand, customer relationships, and distribution strength provide as we introduce new and innovative products. We completed and successfully launched our global digital acceleration program, which is driving improved customer service, cost reductions, and many other benefits. The strength of our business and our cost controls have allowed us to continue to return significant capital to shareholders.
Speaker Change: You are now rejoining the main conference. Mosaic Biosciences business is making significant progress. In fact, we have launched our biological products in North America, Brazil, China, India, and nine other Central American markets.
Bruce Bodine: Our products are now in use on 5 million acres in North and Central America, which highlights the competitive advantage our brand, customer relationships, and distribution strength provide as we introduce new and innovative products. The strength of our business and our cost controls have allowed us to continue to return significant capital to shareholders. We have returned almost $300 million to shareholders, including $160 million of share repurchases, in the first six months of this year.
Speaker Change: Our products are now in use on 5 million acres in North and Central America, which highlights the competitive advantage our brand, customer relationships, and distribution strength provide as we introduce new and innovative products.
Speaker Change: We completed and successfully launched our Global Digital Acceleration Program, which is driving improved customer service, cost reductions, and many other benefits.
Speaker Change: The strength of our business and our cost controls have allowed us to continue to return significant capital to shareholders. We have returned almost $300 million to shareholders, including $160 million of share repurchases in the first six months of this year.
Bruce Bodine: We returned almost $300 million to shareholders, including $160 million of share repurchases in the first six months of this year. Our business improvements are complemented by the positive signs we're seeing in fertilizer and broader agricultural margins. Strong global phosphate demand drove higher prices through the second quarter as seasonal sentiment improved. We believe the long term outlook for phosphate, with increasing demand for food, fiber, fuel, and industrial use, is compelling. Podash contract settlements in China and India established a price floor and brought buyers back to the market. In season fertilizer demand in Brazil is strong, and we continue to execute well amid the recovering ag environment there.
Bruce Bodine: Our business improvements are complemented by the positive signs we're seeing in fertilizer and broader agriculture markets. Strong global phosphate demand drove higher prices through the second quarter as seasonal sentiment improved. We believe the long-term outlook for phosphate, with increasing demand for food, fiber, fuel, and industrial use, is compelling. Potash contract settlements in China and India established a price floor and brought buyers back to the market. In-season fertilizer demand in Brazil is strong, and we continue to execute well amid the recovering ag environment there. Mosaic for Lasanches, results are solid, and our cost position demonstrates improvement.
Speaker Change: Our business improvements are complemented by the positive signs we're seeing in fertilizer and broader agriculture markets.
Speaker Change: Strong global phosphate demand drove higher prices through the second quarter as seasonal sentiment improved.
Speaker Change: We believe the long-term outlook for phosphate, with increasing demand for food, fiber, fuel, and industrial use, is compelling.
Speaker Change: Potash contract settlements in China and India established a price floor and brought buyers back to the market.
Speaker Change: In-season fertilizer demand in Brazil is strong, and we continue to execute well amid the recovering ag environment there. Mosaic for Los Angeles results are solid, and our cost position demonstrates improvements.
Bruce Bodine: Mosaic for lasanches results are solid, and our cost position demonstrates improvements.
Bruce Bodine: Let's take a deeper look at our progress in the U.S. phosphate business, where our goal is to return to a run rate of $8 million per year by the end of 2024. We are making good progress as demonstrated in our second quarter production volumes, which advanced 98,000 tons from the first quarter. On a run rate basis, some of our facilities, specifically far to a new whales, have achieved about 90% of the production levels we need to reach our system-wide goal. Our turnaround work is clearly paying off. For example, in new whales following the turnaround we executed in March and April, we saw a significant step up in production for the second quarter.
Bruce Bodine: Let's take a deeper look at our progress in the U.S. phosphate business, where our goal is to return to a run rate of 8 million tons per year by the end of 2024. We're making good progress, as demonstrated in our second quarter production volumes, which advanced 98,000 tons from the first quarter. On a run rate basis, some of our facilities, specifically Bartow and New Wales, have achieved about 90% of the production levels we need to reach our system-wide goal.
Speaker Change: Let's take a deeper look at our progress in the U.S. phosphate business, where our goal is to return to a run rate of 8 million tons per year by the end of 2024.
Speaker Change: We are making good progress as demonstrated in our second quarter production volumes, which advanced 98,000 tons from the first quarter.
Speaker Change: On a run rate basis, some of our facilities, specifically Barto in New Wales, have achieved about 90% of the production levels we need to reach our system-wide goal.
Speaker Change: Our turnaround work is clearly paying off. For example, in New Wales, following the turnarounds we executed in March and April, we saw a significant step up in production for the second quarter.
Bruce Bodine: In Louisiana, our production run rate has improved after several unplanned outages last year and has reached 85% of the target production.
Bruce Bodine: In Louisiana, our production run rate has improved after several unplanned outages last year and has reached 85% of the target production. Riverview performance in the quarter was lower than the target rate due to the outage caused by a brush fire earlier this year and a normal pace of production ramp-up after a major capacity conversion, which was completed in May. Higher production brings lower unit costs, as you can see in our second quarter results.
Speaker Change: In Louisiana, our production run rate has improved after several unplanned outages last year and has reached 85% of the target production level.
Bruce Bodine: Revision Level. Several projects are scheduled for the remainder of the year, which will further close the gap to the target rate. Riverview Performance in the quarter was lower than target rate due to the outage caused by a brush fire earlier this year and a normal pace of production ramp up after a major capacity conversion, which was completed in May. The outlook for the rest of the year is solid. All in all, we are pleased with the progress we have made in our production ramp. And our hard work will continue to pay off for the remainder of the year.
Speaker Change: Several projects are scheduled for the remainder of the year, which will further close the gap to the target rate.
Speaker Change: Riverview performance in the quarter was lower than target rate due to the outage caused by a brush fire earlier this year and a normal pace of production ramp up after a major capacity conversion which was completed in May.
Speaker Change: The outlook for the rest of the year is solid.
Speaker Change: All in all, we are pleased with the progress we have made in our production ramp and our hard work will continue to pay off for the remainder of the year.
Bruce Bodine: Higher production brings lower unit costs, as you can see in our second quarter results. The majority of our turnaround activity will be complete by the end of the year, resulting in significant production improvements and a $20 to $30 per ton conversion cost savings.
Speaker Change: Higher production brings lower unit costs, as you can see in our second quarter results.
Speaker Change: The majority of our turnaround activity will be complete by the end of the year, resulting in significant production improvements and a $20 to $30 per ton conversion cost savings.
Bruce Bodine: Now, let's move on to a brief look at the markets. Add commodity markets have diverged around the world with corn and soybean prices softening and other crop prices, notably for palm oil, rising. The important factor for Mosaic is that crop nutrients remain affordable for most of the world's farmers, which leads to strong fertilizer demand and application. In phosphate, our long-term positive outlook continues. Rising demand for grains and oil seeds to support both increasing food and fuel demand combines with soaring demand for industrial uses to create competition for limited phosphate supply. Chinese exports remain subdued, and major new supply is years away.
Speaker Change: Now, let's move on to a brief look at the markets.
Speaker Change: Ag commodity markets have diverged around the world, with corn and soybean prices softening and other crop prices, notably for palm oil, rising.
Speaker Change: The important factor for Mosaic is that crop nutrients remain affordable for most of the world's farmers, which leads to strong fertilizer demand and application.
Speaker Change: In phosphate, our long-term positive outlook continues. Rising demand for grains and oil seeds to support both increasing food and fuel demand combines with soaring demand for industrial uses to create competition for limited phosphate supply.
Speaker Change: Chinese exports remain subdued and major new supply is years away.
Bruce Bodine: In the short term, the seasonal price reset that we saw in the first and second quarters of this year was shorter and less severe than expected. The price is ever bounded given strong demand and tight supply. North American demand is particularly strong, with buyers seeking summer fill after emptying their bends this spring. Brazil demand is also good, with growers concerned.
Bruce Bodine: In the short term, the seasonal price reset that we saw in the first and second quarters of this year was shorter and less severe than expected. North American demand is particularly strong, with buyers seeking summer fill after emptying their bins this spring. Brazil's demand is also good, with growers saying, Hello, can you hear me? This is the conference operator.
Speaker Change: In the short term, the seasonal price reset that we saw in the first and second quarters of this year was shorter and less severe than expected.
Speaker Change: prices have rebounded given strong demand and tight supply.
Speaker Change: North American demand is particularly strong, with buyers seeking summer fill after emptying their bins this spring.
Speaker Change: Brazil demand is also good, with growers considering it.
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James ORourke: www.larryweaver.com
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Speaker Change: Due to the positive dynamics and sentiment, as well as subdued raw material costs, stripping margins remain well above historical averages, and we expect strong margins to continue.
Bruce Bodine: After a very strong North American spring planting season, our summer field program was very well received. Now, I'll provide some color to our segment.
Speaker Change: The potash market remains balanced.
Speaker Change: After a very strong North American spring planting season, our summer fill program was very well received.
Speaker Change: In fact, the recent contract settlements in China and India signaled a floor for prices and as usual, stimulated buying activity all over Asia, resulting in Camputex being sold out through Quarter 3.
Speaker Change: We restarted Colonce in early July to make sure we have enough product to meet our customer commitments while Esterhazy is in turnaround.
Speaker Change: Keep in mind, we need to run Colonce for approximately 5 months to offset 1 month of Esterhazy production.
Bruce Bodine: Now, I provide some color to our segment results. In Fostate, we reported adjusted EBITDA of $308 million on revenue of $1.2 billion. Sales volumes were solid and higher than first quarter, and prices were strong. Margins were up from the first quarter due to strong pricing, fewer tons purchased from third parties, and our lower conversion costs. We expect sales volumes increased sequentially in the third quarter.
Speaker Change: We will continue to flex Colante as needed.
Speaker Change: Now, I'll provide some color to our segment results.
Speaker Change: In phosphate, we reported adjusted EBITDA of $308 million on revenue of $1.2 billion.
Speaker Change: Sales volumes were solid, and higher than first quarter, and prices were strong.
Speaker Change: Margins were up from the first quarter due to strong pricing, fewer tons purchased from third parties, and our lower conversion costs.
Bruce Bodine: We expect sales volumes to increase sequentially in the third quarter. Adashidzhi Dibita's revenue was $271 million on revenue of $663 million. While second-quarter prices declined from the first quarter, sales volumes were solid, and costs were down. We remain highly efficient in our operations. In fact, production unit costs improved again in the second quarter, with MOP cash production costs per ton declining 11%. Our results were solid due to our strategy of prioritizing margin and cash flow over volume.
Bruce Bodine: Had I suggested EBITDA was $271 million on revenue of $663 million. While second quarter prices declined from the first quarter, sales volumes were solid and costs were down. We remain highly efficient in our operations. In fact, production unit costs improved again in the second quarter, with MOP cash production costs per ton declining 11% from the first quarter. Our third quarter pricing expectations reflect a higher mix of international sales compared with the second quarter. In Brazil, we recorded the adjusted EBITDA of $96 million and sales volumes of 2.2 million tons. Our results were solid due to our strategy of prioritizing margin and cashflow over volume.
Speaker Change: We expect sales volumes to increase sequentially in the third quarter.
Speaker Change: Hot Ash Adjusted EBITDA was $271 million on revenue of $663 million.
Speaker Change: While second quarter prices declined from the first quarter, sales volumes were solid and costs were down.
Speaker Change: We remain highly efficient in our operations.
Speaker Change: In fact, production unit costs improved again in the second quarter, with MOP cash production costs per ton declining 11% from the first quarter.
Bruce Bodine: Our distribution margin was within our normalized $30 to $40 per ton range, and we expect similar margins in the third quarter. Our production margins improved from prior year. Cash unit costs of mine rock and phosphate and potash production all came down due to our focus on cost reductions. In addition, we had another strong quarter in code product sales.
Speaker Change: Our production margins improved from prior year.
Bruce Bodine: Finally, a brief word on capital allocation. Our strategy has not changed. We're investing in the business, conserving capital where we can, and returning excess cash to shareholders. To conclude, Losek is executing well across our strategic initiatives, and we are generating solid results. And our outlook for the remainder of 2024 and beyond is positive.
Bruce Bodine: Finally, a brief word on capital. Our strategy has not changed. We are conserving capital where we can and returning excess cash to shareholders, and our outlook for the remainder of 2024 and beyond is positive. Now, let's move on to the first set of questions.
Speaker Change: Our strategy has not changed.
Unknown Executive: Thanks, Bruce.
Unknown Executive: Before we move on to the live Q&A, as we've done in task quarters, we'd like to address some of the most common questions received after publishing our earnings last night. Our first question is related to the markets. What is your view on the demand outlook for fertilizers given the recent weakness in corn and soybean prices?
Unknown Executive: Our first question is related to the market.
Bruce Bodine: That's a great question. So let me start first with the ag commodity market, which is very constructive with global grain and oil seeds stuck to use ratios still well below historical average. While no doubt corn and soybean prices have softened, other grain and oil seeds and specialty crops are favorable, especially for crops like palm oil and rice. And I want to remind investors, as we've said in the last couple of earnings calls, that only one third of phosphate and potash consumption is related to corn and soybeans. And the demand will, from the remaining crops, continue to support constructive fertilizer fund.
Speaker Change: While no doubt corn and soybean prices have softened, other grain and oil seeds, especially crops, are favorable, especially for crops like palm oil and rice.
Speaker Change: And I want to remind investors, as we've said in the last couple of earnings calls, that only one-third of phosphate and potash consumption is related to corn and soybeans.
Bruce Bodine: Manus. On a higher level, phosphate demand is strong across all the key markets we sell in. For potash, demand has definitely come back significantly, particularly in Southeast Asia given the favorable weather conditions, pent-up demand for multi-year under-application, and the current attractive prices. The recent settlements of the China and India seaborn contracts are going to further simulate demand all over Asia.
Unknown Executive: The recent settlements of the China and India seaborne contracts
Jenny Wong: With that, I'm going to pass it over to Jenny to talk a little more details about the near-term demand.
Speaker Change: With that, I'm going to pass it over to Jenny to talk a little more details about the near-term demand.
Jenny Wong: Thanks, Bruce. There's no doubt that growers in the U.S.
Jenny Wong: and Brazil are watching the future corn serve in prices, along with any news that about whether development, which might impact the yield projections and his prices. In terms of the near-term demand, in North America, we had a very strong summer fuel program. In fact, we have sold out all of our Q3 available phosphate and 80% of our available Pash fund in the North America market.
Jenny: There's no doubt that growers in the U.S. and Brazil are watching the future of corn soybean prices.
Jenny: That's about weather development, which might impact the yield projection and its prices.
Jenny: In terms of near-term demand,
Unknown Executive: In fact, we have sold out all of our Q3 available phosphates and 80% of our available potash tons in North American markets. We are seeing 20% growth year over year, supported by very strong ag fundamentals and supported by their policies to ensure our food security.
Jenny Wong: In Brazil, south of our season is in full swing. The demand is robust. We expect 2024 shipment is going to be at the record or going to set a new record. We are having a very full self-book to execute upon. We have sold 100% of our available towns for Q3 with a very strong customer pre-payment.
Jenny: In Brazil, soccer season is in full swing.
Jenny: The demand is robust.
Speaker Change: We expect 2024 shipment is going to be at the record or going to set a new record.
Speaker Change: We are having a very full sales book to execute upon. We have sold 100% of our available time for Q3 with a very strong customer prepayment.
Jenny Wong: In India, with favorable monsoon, growers need their providers to maximize their production on rice, wheat, and other crops. While at sea, in order to get more DAP into the country, in China, we have seen very strong domestic shipment for both phosphate and Pash in the first half of the year. We are seeing 20% growth year over year, supported by very strong ag fundamentals and supported by their policies to ensure our food security.
Speaker Change: In India, with favorable menstrual
Speaker Change: in order to get more DAP into the country.
Speaker Change: In China.
Speaker Change: We have seen very strong domestic shipments for both phosphate and potash in the first half of the year. We are seeing 20% growth year over year, supported by very strong ag fundamentals and supported by their policies to ensure food security.
Bruce Bodine: What is the latest on phosphate exports at China? And how do you see that evolving over the rest of the year? This is something we pay attention to a lot. We anticipate limited exports of phosphate out of China, which bodes well for global phosphate prices. First half exports were approximately 1 million tons below this same time in 2023 due to strong in-country demand for both fertilizers and industrial uses. China's domestic crisis continued to move up, considering that demand. And we believe the export restrictions will likely remain or potentially even be tightened to limit further domestic price escalation.
Unknown Executive: Well, this is something.
Speaker Change: Well, this is something we pay attention to a lot, and we anticipate limited exports of phosphate out of China, which bodes well for global phosphate prices.
Speaker Change: China's domestic prices continue to move up considering that demand and we believe the export restrictions will likely remain or potentially even be tightened to limit further domestic price escalation.
Bruce Bodine: With that in mind, I'm going to ask Jenny and pass it over to her to share some additional details.
Jenny Wong: With that, I'm going to ask Jenny and pass it over to her to share some additional details.
Jenny Wong: Thanks, Bruce. As Bruce mentioned, the first half export in China reduced by 27% or over a million tons. That is the result of the changes in Chinese local SND for phosphate. On the demand side, Chinese phosphate domestic shipment increased over 20% in the first half of the year, which is probably the record. They are driven by several factors. First, strong ag fundamentals, supported by ag policies to ensure food security. Second, meaningful growth of vegetable and food to planting acreage over the last five years. Third, the introduction of high-tech seed technologies has required more balanced fertilizer to maximize the yield.
Jenny Wong: As Bruce mentioned, Third, the introduction of high-tech seed technologies has required more balanced fertilizer to maximize yield. And then let's look at the supply side. Continued shift from fertilizer production to industrial products like PPA, LFP has reduced availability of fertilizers, especially DAP. So, the growth of domestic demand, the reduction of production, and thus rising prices, have had the Chinese government tightly control the export of phosphate out of China. We expect the restrictions are going to continue in the second half and going forward.
Bruce Bodine: As Bruce mentioned,
Bruce Bodine: The first half export in China reduced by 27% or over a million tons.
Bruce Bodine: Supported by AG policies to ensure food security.
Bruce Bodine: Second, meaningful growth of vegetable and fruit planting acreage over the last five years.
Bruce Bodine: Third, the introduction of high-tech seeds technologies have required more balanced fertilizer to maximize the yield.
Jenny Wong: And lastly, we also recognize there are some earlier seasonal pools for the fall demand. As a result of it, the demand of Chinese phosphate domestic shipment has increased significantly in the first half of the year.
Bruce Bodine: And lastly, we also recognize there are some earlier seasonal pools for the forward demand. As a result of it, the demand of Chinese phosphate domestic shipment has increased significantly in the first half of the year.
Jenny Wong: And then let's look at the supply side. Continued shift from fertilizer production to industrial products like PPA, LSP has reduced availability of fertilizers, especially DAP. The production of LSP in the first half of the year has reached to over 1.1 million tons, which is the increase of 82% year over year. And that's represent over 90% compound annual growth rate from 2020 to 2020 straight. So in the first half of 2024, over 1 million tons of DAP products are shifted to LSP. So the growth of domestic demand, the reduction of production, last rising prices have had Chinese government tightly controlled the export of phosphate out of China.
Bruce Bodine: And then let's look at the supply side.
Bruce Bodine: Continued shift from fertilizer production to industrial products like PPA, LFP has reduced availability of fertilizers, especially DAP.
Bruce Bodine: The production of LFP in the first half of the year has reached to over 1.1 million tons.
Bruce Bodine: which has an increase of 82% year over year.
Bruce Bodine: And that represents over 90% compound annual growth rate from 2020 to 2023.
Bruce Bodine: So in the first half of 2024, over 1 million tons of DAP products are shifted to LFP.
Jenny Wong: We expect the restrictions are going to continue in the second half and going forward.
Bruce Bodine: We expect the restrictions are going to continue in the second half and going forward.
Unknown Executive: Sticking with phosphates, for our next question, how's the production wrap-up going, and how do you see the rest of the year playing out from a volume and cost perspective?
Bruce Bodine: Sticking with phosphates for our next question, how's the production ramp-up going and how do you see the rest of the year playing out from a volume and cost perspective?
Speaker Change: Sticking with phosphates for our next question, how is the production ramp up going and how do you see the rest of the year playing out from a volume and cost perspective?
Unknown Executive: We're making significant progress in our phosphate production ramp-up, and as a result, we're seeing good fixed-cost absorption benefits, especially in the past two months. You can see the progress in our second quarter production volume and unit conversion. We have certain sites, for example, Bartow in New South Wales, which are performing particularly well and are contributing at the rates required for the business to return to our historical production objectives. Note, we will always see some variations from quarter to quarter due to the normal turnaround schedule, the scope of those turnarounds, and the decisions we make on finished product mix from the phosphoric acid we produce. Unit costs are expected to demonstrate continued improvement as we increase production.
Bruce Bodine: We're making significant progress in our phosphate production ramp up. And as a result, we're seeing good fixed cost absorption benefits, especially in the past two months. You can see the progress in our second quarter production volume and unit conversion costs. Our volumes were up close to 100,000 tons sequentially, which is a significant achievement. And our cash conversion costs were the lowest since the end of 2023. We have certain sites, for example, Barto and New Wales, which are performing particularly well and are contributing at the rate required for the business to return to our historical production objectives.
Speaker Change: We are making significant progress in our phosphate production ramp up and as a result we are seeing good fixed cost absorption benefits, especially in the past two months.
Speaker Change: You can see the progress in our second quarter production volume and unit conversion costs.
Speaker Change: Our volumes were up close to 100,000 tons sequentially, which is a significant achievement. And our cash conversion costs were the lowest since the end of 2023.
Speaker Change: We have certain sites, for example Bartow in New Wales, which are performing particularly well and are contributing at the rates required for the business to return to our historical production objectives.
Bruce Bodine: We'll undertake several maintenance turnarounds and Louisiana Riverview to further improve our production run rate in the second half of the year. Note, we will always see some variations from quarter to quarter due to the normal turnaround schedule, the scope of those turnarounds, and the decisions we make on finished product mix from the phosphoric acid we produce. So, we expect annual production to be in the range of 7.8 to 8.2 million tons.
Speaker Change: We'll undertake several maintenance turnarounds in Louisiana and Riverview to further improve our production run rate in the second half of the year.
Speaker Change: Note, we will always see some variations from quarter to quarter due to the normal turnaround schedule, the scope of those turnarounds, and the decisions we make on finished product mix from the phosphoric acid we produce.
Speaker Change: So, we expect annual production to be in the range of 7.8 to 8.2 million tons once we get back into a normal routine of turnaround activities.
Bruce Bodine: Once we get back into a normal routine, turnarounds. and activities. Unit costs are expected to demonstrate continued improvement as we increase production, and we're on track to achieve $20 to $30 per tonne and cost reduction from higher operating efficiency.
Speaker Change: Unit costs are expected to demonstrate continued improvement as we increase production, and we're on track to achieve $20 to $30 per ton in cost reduction from higher operating efficiency.
Bruce Bodine: Now switching over to Podash, what's the thought process on restarting Kalansi?
Pawdash: Now switching over to Podash, what's the thought process on restarting Polansi?
Bruce Bodine: Well, thanks for that question. I know it's on a lot of people's minds, but for Mosaic, and we've been consistent with this, Kalansi is an important component of our Podash portfolio. It gives us the flexibility to meet our operating objectives. One objective is to ensure we meet market demand. Now that the settlements of the China and India Podash contracts are behind us, and a price floor is established, our focus is to produce enough product to meet customer commitments. We have maintenance activities and turnaround scheduled for assets every year, and in fact, SRAZ is scheduled for one in the third quarter of this year.
Speaker Change: Well, thanks for that question. I know it's on a lot of people's minds, but for Mosaic, and we've been consistent with this, Kalanse is an important component of our potash portfolio.
Speaker Change: It gives us the flexibility to meet our operating objectives.
Speaker Change: One objective is to ensure we meet market demand.
Speaker Change: Now that the settlements of the China and India potash contracts are behind us, and a price floor is established,
Unknown Executive: Our focus is to produce enough product to meet customer commitments, which we just mentioned were sold out for the third quarter; we must restart Colonson. And just as a reminder, it takes approximately five months of Kalan-Se operation to replace approximately one month of Esterhazy production.
Speaker Change: Our focus is to produce enough product to meet customer commitments.
Speaker Change: We have maintenance activities and turnarounds scheduled for our assets every year. In fact, Esterhazy is scheduled for one in the third quarter of this year.
Bruce Bodine: In order to have enough product on hand to meet our commitments with architects, which we just mentioned was sold out for the third quarter, we must rest our Kalansi. And just as a reminder, it takes approximately five months of Kalansi operating to replace approximately one month of SRAZ production.
Speaker Change: In order to have enough product on hand to meet our commitments with Camputex, which we just mentioned was sold out for the third quarter, we must restart Colense.
Speaker Change: And just as a reminder, it takes approximately five months of Kalan-Se operating to replace approximately one month of Esterhazy production.
Unknown Executive: Our next question is related to Brazil.
Unknown Executive: Our next question is related to Brazil.
Unknown Executive: The market has been challenging for several quarters in a row within your industry.
Speaker Change: Our next question is related to Brazil.
Bruce Bodine: What is the latest situation from your perspective? The operating environment in Brazil agriculture has been challenging for the past year, and it has taken a toll on many participants in the market. I will highlight that our deep expertise and strong brand in Brazil market, with over two decades of distribution experience, has allowed us to mitigate the market-related risks and deliver strong results. Our assets, which include in-country production, ports, warehouses, and blending facilities, provide us with a required scale, geographic diversification, and cost efficiency to succeed in this geography. Our strengths have allowed us to gain further advantage as others have exited the market or reduced their footprint in country.
Speaker Change: The market has been challenging for several quarters in a row within your industry. What is the latest situation from your perspective?
Speaker Change: The operating environment in Brazil agriculture has been challenging for the past year.
Speaker Change: And it has taken a toll on many participants in the market.
Speaker Change: I will highlight that our deep expertise and strong brand in Brazil market, with over two decades of distribution experience, has allowed us to mitigate the market-related risks and deliver strong results.
Speaker Change: Our assets, which include in-country production, ports, warehouses, and blending facilities, provide us with the required scale, geographic diversification, and cost efficiency to succeed in this geography.
Unknown Executive: Our strengths have allowed us to gain further advantages as others have exited the market or reduced their footprint in government.
Speaker Change: Our strengths have allowed us to gain further advantage as others have exited the market or reduced their footprint in country.
Bruce Bodine: Retailers and large growers have turned to us for reliable supply, and we are here to meet that demand.
Speaker Change: Retailers and large growers have turned to us for reliable supply.
Bruce Bodine: For the next question, you previously announced targets related to cost savings and CAPEX reductions. Are you on track to meet those targets? We have made significant progress on our cost and CAPEX initiatives.
Speaker Change: And we are here to meet that demand.
Speaker Change: Thanks Bruce. For the next question, you've previously announced targets related to cost savings and CapEx reductions.
Unknown Executive: Are you on track to meet those goals?
Unknown Executive: We've made significant progress on our cost and CapEx. In phosphate, higher production volumes have significantly improved our fixed cost absorption. We have had very good results in the past two months, as I previously mentioned, and as you can see, our cash conversion costs have decreased 15% from the high point at the end of last year. We do expect further improvement in the remainder of the year as production volume continues to recover. Operating efficiency is not just in the phosphate segment.
Speaker Change: Are you on track to meet those targets?
Bruce Bodine: There are three categories. The first, operating efficiency. In phosphate, higher production volumes have significantly improved our fixed cost absorption. We had very good results in the past two months, as I previously mentioned, and as you can see, our cash conversion costs have decreased 15% from the high point in the end of last year. We do expect further improvement in the remainder of the year as production volume continues to recover. Operating efficiency is not just in the phosphate segment, however. Costs came down in the potash and Mosaic for lasanches segments as well. Our unit cash costs of mine rock, phosphate conversion, and potash production declined across all three segments since the same time last year.
Speaker Change: We've made significant progress on our COST and CAPEX initiatives.
Speaker Change: There are three categories. The first, operating efficiency.
Speaker Change: In phosphate, higher production volumes have significantly improved our fixed-cost absorption.
Speaker Change: We had very good results in the past two months, as I previously mentioned. And as you can see, our cash conversion costs have decreased 15% from the high point in the end of last year.
Speaker Change: We do expect further improvement in the remainder of the year as production volume continues to recover.
Bruce Bodine: Cost came down in the Potash and Mosaic for lasagna segments as well. Second, our cost focus is not exclusively on operations. As mentioned last quarter, we will start reaping the benefits in the second half of 2024. The full program will be complete by mid 2025 and result in run rate savings of approximately $20 to $30 million. Our other cost controls in Brazil and SG&A reduction are also on track. Since the inception of the initiatives, we have achieved about $50 million in run rate cost reduction. About one-third of the total $150 million target. Finally, on CapEx, we've finished several growth projects in the past six.
Speaker Change: Operating efficiency is not just in the phosphate segment, however.
Speaker Change: Costs came down in the potash and mosaic for lasagna segments as well.
Speaker Change: Our unit cash costs of mined rock, phosphate conversion, and potash production declined across all three segments since the same time last year.
Bruce Bodine: Second, our cost focus is not exclusively on operations. We have a focus on reducing costs in all areas of the company. As mentioned last quarter, we have had plans to reduce headcount, mostly third-party contractors. I am pleased to announce we have implemented the first phase of that reduction. We will start reaping the benefits in the second half of 2024. The full program will be complete by mid 2025 and result in run rate savings of approximately 20 to 30 million dollars. Our other cost controls in Brazil and SGA reduction are also on track. Since the inception of the initiatives, we have achieved about 50 million dollars in run rate cost reductions, about one third of the total 150 million dollar target.
Speaker Change: Second, our cost focus is not exclusively on operations. We have a focus on reducing costs in all areas of the company.
Speaker Change: As mentioned last quarter,
Speaker Change: We have had plans to reduce headcount, mostly third-party contractors.
Speaker Change: I'm pleased to announce we have implemented the first phase of that reduction.
Speaker Change: We will start reaping the benefits in the second half of 2024.
Speaker Change: The full program will be complete by mid-2025 and result in run rate savings of approximately $20 to $30 million.
Speaker Change: Our other cost controls in Brazil and SG&A reduction are also on track.
Speaker Change: Since the inception of the initiatives, we have achieved about $50 million in run rate cost reductions.
Bruce Bodine: Finally, on the CAPX front, we finished several growth projects in the past six months. As these projects continue to wind down, we are on track to reduce CAPX by 200 million dollars this year. Thanks, Bruce.
Speaker Change: About one-third of the total $150 million target.
Speaker Change: Finally, on the CapEx front.
Speaker Change: We finished several growth projects in the past six months.
Speaker Change: As these projects continue to wind down, we are on track to reduce CapEx by $200 million this year.
Bruce Bodine: Thanks, Bruce. With that, we'll now move on to the open question-and-answer session.
Unknown Executive: With that, we will now move on to the open question and answer session.
Speaker Change: Thanks, Bruce. With that, we'll now move on to the open question and answer session.
Unknown Executive: Operator, please open the line for follow-up questions. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using this speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. In the interest of time, we will limit everyone to one question and one follow-up.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone.
Speaker Change: Operator, please open the line for follow-up questions.
Speaker Change: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch-tone phone.
Speaker Change: If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. In the interest of time, we will limit everyone to one question and one follow-up. At this time, we'll pause momentarily to assemble our roster.
Operator: In the interest of time, we will limit everyone to one question and one follow-up. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Ben Isaacson from Scotiabank. Please go ahead.
Unknown Executive: At this time, we will pause momentarily to assemble a roster.
Benjamin Isaacson: Our first question comes from Ben Isaacson from Scotia Bank.
Unknown Executive: Please go ahead.
Speaker Change: Our first question comes from Ben Isaacson from Scotiabank. Please go ahead.
Benjamin Isaacson: Thank you very much and good morning everyone. A question on the phosphate side of the business.
Benjamin Isaacson: Good morning, everyone. Question on the phosphate side of the business. You have high prices against low crop prices, but it doesn't sound like you're worried about demand destruction in the Americas. It doesn't sound like you're worried about trade flow of becoming an issue out of China. So, if we put our bear hats on, what's going to break this phosphate cycle right now? Is it new supply coming on? Can you address that?
Ben Isaacson: Thank you very much and good morning everyone. Question on the phosphate side of the business.
Ben Isaacson: You have high prices against low crop prices, but it doesn't sound like you're worried about demand destruction in the Americas. It doesn't sound like you're worried about trade flow becoming an issue out of China.
Speaker Change: So, if we put our bear hats on, what's going to break this phosphate cycle right now? Is it new supply coming on? Can you address that? And then just as my follow-up, can you talk about where you expect LFP demand to be in DAP equivalent terms in 2030? Thank you.
Benjamin Isaacson: And then just as my follow-up, can you talk about where you expect the LFP demand to be in DAP equivalent terms in 2030? Thank you.
Bruce Bodine: Well, thanks, Ben.
Bruce Bodine: I'll take the first part of your question and maybe pass over to Jenny for any commentary on the LFP. We agree in phosphate prices look very constructive for the near term. And as far as what is out there to change something, we don't see a lot of new capacity come on, which historically is announced in the near term, which historically has been something that could influence outlook on price and the fact that that's not there. If it's significant, we're very optimistic about how prices are going to play out. If you look at our stripping margins, well over $400, we kind of continue to see that in the back half of the year and that kind of mid-400s range.
Speaker Change: Well thanks, Ben. I'll take the first part of your question and maybe pass it over to Jenny for any commentary on the LFP.
Bruce Bodine: We agree. I mean, phosphate prices look very constructive for the near term. We're very optimistic about how prices are going to play out. If you look at our stripping margins, well over $400. We kind of continue to see that. In the back half of the year, in that kind of mid 400s range, no doubt there are affordability issues. But if you look at total crop affordability, I think Jenny talked about that earlier in the fireside chat.
Speaker Change: We agree. I mean, phosphate prices look very constructive for the near term.
Speaker Change: As far as what is out there to change something,
Speaker Change: We don't see a lot of new capacity come on, which historically is or announced in the near term, which historically has been, you know, something that
Speaker Change: could Influence, you know kind of outlook on price and in the fact that that's not Their significance. We're very optimistic about how prices are going to play out If you look at you know, our stripping margins well over $400. We kind of continue to see that
Speaker Change: https://www.youtube.com.au
Bruce Bodine: No doubt there's affordability issues, but if you look at total crop affordability, I think Jenny talked about that earlier in the fireside chat. It is still very constructive, although no doubt pressures on certain areas, on corn and soybeans as an example. But again, 30%, 33% of overall PNK demand is in corn and soybeans. And then the other 67% is in other green and oil seeds, which, quite honestly, is very constructive and healthy; for example, palm oil, sugar cane, coffee, other things like that. But I don't see right now a big catalyst to change that in the coming future.
Speaker Change: In the back half of the year, in that kind of mid 400s range.
Speaker Change: No doubt there's affordability issues, but if you look at total crop affordability.
Bruce Bodine: It is still very constructive, although, you know, no doubt pressures on, you know, certain areas for corn and soybeans as an example. But, you know, again, you never know what could come out, you know, geopolitically or something like that. But I think that's what it would take. With that, I'll turn it over to Jenny to maybe answer the LFP part. Or Jenny, if you've got anything else to add.
Jenny: I think Jenny talked about that earlier in the Fireside Chat. It is still very constructive, although, you know, no doubt pressures on, you know, certain areas on corn and soybeans as an example. But, you know, again,
Speaker Change: 30%, 33% of overall P&K demand is in corn and soybeans. And then, you know, the other 67% is in other grain and oil seeds, which, you know, quite honestly, is very constructive and healthy, for example, palm oil, sugar cane, coffee, you know, other things like that. But
Speaker Change: I don't see right now a big catalyst to change that in the, you know, for coming future.
Bruce Bodine: David, but you never know what could come out geopolitically or something like that. But I think that's what it would take.
Jenny: But you never know what could come out, you know, geopolitically or something like that, but I think that's what it would take. With that, I'll turn it over to Jenny to maybe answer the LFP part, or Jenny, if you've got anything else to add on the market itself.
Jenny Wong: With that, I'll turn it over to Jenny to maybe answer the LFP part, or Jenny, if you've got anything else to add on the market itself.
Jenny Wong: Sure. Thanks, Bruce. Ben, probably to your question on LFP. Just want to remind ourselves at this point of time, LFP is mainly used in China and mainly used both for Chinese producers and also for Tesla. So the LFP have been used as a battery for EV. The adoption in Chinese production was already up to 69%, meaning 69% of the EV batteries are using LFP. Longer term projection, there are very, very big range of the projection on LFP growth globally. We believe going forward the global EV battery adoption for LFP is going to be somewhere between 35% to 55%.
Jenny: Sure. Thanks, Bruce. Ben, probably to your question on LFP, just want to remind ourselves at this point of time, LFP is mainly used in China and mainly used
Jenny: both for Chinese producers and also for Tesla. So the LFP have been used as a battery for EV adoption in Chinese production.
Jenny: was already up to 69%, meaning 69% of the EV batteries are using LFP.
Speaker Change: Unknown Speaker ...longer term projection.
Speaker Change: There are very big range of the projection on LFP growth globally. We believe going forward, the global EV battery adoption for LFP is going to be somewhere between 35 to 55 percent.
Jenny Wong: We don't believe it is going to ever reach to the level in China today.
Speaker Change: We don't believe it is going to ever reach to the level as it of in China today. The other bigger driver on LFP adoption is really on the storage, storage
Jenny Wong: The other bigger driver on LFP adoption is really on the storage energy storage ESS stationary battery. The adoption of that part on LFP is already over 80%. That battery being produced in China mainly and shipped to a rest of the world and by Tesla as well. We believe that is going to be the major driver for LFP going forward. So very wide range, and if you use China as a proxy for EV, the future growth from rest of the world is going to continue.
Speaker Change: Energy Storage ESS Battery, and the adoption of that part on RFP is already over 80%.
Jenny Wong: And that battery is being produced in China mainly and shipped to the rest of the world by Tesla as well. And we believe that is going to be the major driver for LFP going forward. So, very wide range. And if you use China as a proxy for EV, future growth from the rest of the world is going to continue. And lastly, people don't pay a lot of attention to the storage on the stationary battery, which is probably going to be a bigger driver.
CastingWords: Transcription by CastingWords
CastingWords: So, very wide range, and if you use China as a proxy for EV, the future growth from rest of the world is going to continue, and lastly, people don't pay a lot of attention on the storage stationary battery, which is probably going to be a bigger driver.
Jenny Wong: And lastly, people don't pay a lot of attention on the storage stationary battery, which is probably going to be a bigger driver.
Vincent Andrews: The next question comes from Vincent Andrews from Oregon Stanley. Please go ahead. Thank you and good morning, everyone. I'm wondering just to start off with if you give us an update on where you think industry shipments are going to be for 24 for both Podash and Fostate and whether those expectations have improved since the year began. And then, as a language, start there.
CastingWords: Thanks.
CastingWords: The next question comes from Vincent Andrews from Morgan Stanley . Please go ahead.
Unknown Caller: Thank you and good morning everyone. I was wondering just to start off with, if you could give us an update on where you think industry shipments are going to be for 2024 for both potash and phosphate and whether those expectations have improved since the year began. And then, as a start, why don't we just start there?
Vincent Andrews: Thank you and good morning everyone. I'm wondering just to start off with if you give us an update on where you think industry shipments are going to be for 24 for both potash and phosphate and whether those expectations have improved since since the year began and then as a why don't we just start there.
Bruce Bodine: Yeah, no, thanks, Vincent. Yeah, for Fostate, our projections in the range of 73 to 76 million tons global shipments. For Podash, that range is 70 to 73.
Speaker Change: Yeah, no, thanks, Vincent. For phosphate, our projections in the range of 73 to 76 million tons global shipments.
Jenny Wong: For potash, that range is 70 to 73. I think, and Jenny, correct me if I'm wrong, our potash numbers have kind of gone up.
Bruce Bodine: I think in Jenny. Correct me if I'm wrong. And really all Asian markets in general given where these contracts have settled in China and India and kind of the sentiment that that's provided confidence in the industry that the kind of the bottom set in on Podash on Fostate. I don't think that range has changed very much for us since the beginning of the year, just given that supplies limited, Vincent. Okay.
Speaker Change: For potash, that range is 70 to 73. I think, and Jenny, correct me if I'm wrong, our potash numbers have kind of gone up.
Jenny: A little bit that midpoint around a million tons based on what we're seeing develop in Southeast Asia and really all Asian markets in general given
Jenny: You know, where these contracts have settled in China and India, and kind of the sentiment that that's provided confidence in the industry that kind of the bottom set in on potash. On phosphate, I don't think that range has changed very much for us.
Jenny: Since the beginning of the year, just given that supply is limited.
Unknown Caller: Okay. And then, as a follow-up, if you could just give us a refresher or an update on where the CVD situation in the U.S. is. I believe it's still under some back and forth between the different relevant agencies. But if you could just give us any pertinent updates there, that would be helpful.
Bruce Bodine: And then as a follow-up, if you could just give us a refresh or an update on where the CVD situation in the US is, I believe it's still under some back and forth between the different relevant agencies. But if you could just give us any pertinent update there, that would be helpful. Yeah, there's, as we've said before, always a lot going on in that space. I know it's hard to track, but I T.C. still has, you know, appeals and rulings that they owe the industry. And then Department of Commerce several months ago came out with their preliminary rate adjustments for last year, 2023.
Paul Massoud: Paul Massoud.
Paul Massoud: Okay. And then as a follow-up, if you could just give us a refresh or an update on where the CVD situation in the U.S. is. I believe it's still under some back and forth between the different relevant agencies. But if you could just give us any pertinent update there, that would be helpful.
Speaker Change: Yeah, there's, as we've said before, there's always a lot going on in that space. I know it's hard to track, but ITC still has...
Speaker Change: appeals and rulings that they owe the industry. And then Department of Commerce several months ago came out with their preliminary rate adjustments for last year, 2023. And those...
Bruce Bodine: And those went up for OCP, like 12%. They went down for Foss aggro, about 10%, and stayed the same for Eurocamp. But again, those are preliminary. The final numbers will come out in November. So we'll wait and see what happens between now.
Speaker Change: went up for OCP like 12%, they went down for Phos Agro about 10%.
Speaker Change: and stayed the same for Eurochem. But again, those are preliminary. The final numbers will come out in November . So we'll wait and see what happens between now and then.
Unknown Executive: What will happen between now and then?
Joel Jackson: And then our next question comes from Joel Jackson, from BMO Capital Markets.
Operator: Our next question comes from Joel Jackson from BMO Capital Markets. Please go ahead.
Unknown Executive: Please go ahead.
Speaker Change: Our next question comes from Joel Jackson from BMO Capital Markets. Please go ahead.
Joel Jackson: Hi, I'm good morning. Some of Bertolos Antes. Can you talk about, you know, normally obviously going to see seasonality in Q3, the business earns more in Q3 versus Q2 talking about normal? Can you talk about like what you're seeing in that business? Are volumes normal or are we seeing the destocking or just in time in Brazil? Are margins going to be similar? In Q3 versus Q2, to the point where maybe you'd see a smaller Q3 seasonal earnings bond than normal Q2s because Q2 was pretty good for margin.
Joel Jackson: Hi. Good morning. I'm at Fertile Azontes.
Speaker Change: Can you talk about, you know, normally we're obviously going to see seasonality in Q3, the business earns more in Q3 versus Q2. Can you talk about like what you're seeing in that business? Are volumes normal? Or are we seeing a bit of destocking or just in time in Brazil?
Speaker Change: Our margin is going to be similar in Q3 versus Q2, to the point where maybe you'd see a smaller Q3 seasonal earnings bump than normal Q2s, because Q2 was pretty good for margin. Thank you.
Bruce Bodine: Yeah, hey, thanks, Joel.
Jenny Wong: I'll start just at the high level. Maybe Jenny can get into some of the details on seasonality. But what we're pretty pleased overall with the performance of Mosaic for Lizontes. And you know, I know in this space, there's a lot of other players that are not having as good news and success. For us, that could be an opportunity. But we do see margins staying pretty steady in that $20 to $40 range for our distribution volumes. And, and don't see that really changing much. You know, on the volume side overall in Brazil, still see very good overall volumes and total fertilizer demand for the year.
Speaker Change: Thanks, Joel. I'll start just at the high level. Maybe Jenny can get into some of the details on seasonality.
Speaker Change: We're pretty pleased overall with the performance of Mosaic Fertilizantes. I know in this space there's a lot of...
Speaker Change: Other players are not having as good
Speaker Change: And don't see that really changing much. You know, on the volume side, overall in Brazil, still see very good overall volumes and total fertilizer demand for the year.
Jenny Wong: Maybe there's some risk at the end of the year due to some things, but still see and Jenny can get into that still see at or near historical fertilizer shipments in that market for the full year, Jenny.
Unknown Executive: Maybe there's some risk at the end of the year due to some things. But still, see, and Jenny can get into that. Still see, either way.
Jenny Wong: Sure, probably just want to provide a little bit of color on the seasonality and the where we see the market as of today. The suffer season is in full swing. We are saying very strong demand and which is basically the ongoing Q3 is the delivery for the suffer season. The farm economics were very solid, and the farmers are selling their own crops. So being are actually ahead of last year and at five years average. Though they're selling of the corn a little bit slower than five years average, but they're same as last year. So farmers are really keeping pace on selling their crops, which are really improving the liquidity in the system.
Speaker Change: The SAFR season is in full swing. We are seeing very strong demand and which is basically the ongoing Q3 is the delivery for the SAFR season.
Speaker Change: Our soybeans are actually ahead of last year.
Speaker Change: Though their selling of the corn a little bit
Speaker Change: So farmers are really keeping pace on selling their crops, which are really improving the liquidity in the system.
Jenny Wong: Specifically for fertilizer, they call commercialization. If we assume the full year is going to set a new record for the shipment of the year, 82% of the fertilizers for the full year has been sold. This number is slightly lower than last year for more that we're tracking the same pace as of last year. So we're selling ahead of the market trained for the season. And even with that, we're focusing on value than volume, and we really part high seeing ourselves and shipment to the customers who have a much lower credit risk.
Speaker Change: Specifically for fertilizer, they call it commercialization. If we assume the full year is going to set a new record for the shipment of the year, 82% of the fertilizers for the full year have been sold.
Speaker Change: This number is slightly lower than last year.
Speaker Change: For Mosaic, we are tracking the same pace as of last year.
Speaker Change: The market trend for the season. Even with that, we're focusing on value, then volume, and we're really prioritizing our sales and shipment to the customers who have a much lower credit risk.
Jenny Wong: Lastly, there are some potential shifts for the Q4 sales, which is a suffering season for corn and cotton. And there might be a shift from November, December itself into January. That is going to define what is going to be the final shipment in Brazil going to be. The farmers are relatively more cautious for that season, seasonal buying. As of today, we have seen 30% of the buying for Sabrina and the Versus in the mid 30s in the previous year. So it's a relatively slower. There might be some of the demand shifting from late Q4 into early Q1.
Speaker Change: The farmers are relatively more cautious.
Speaker Change: As of today, we have seen 30% of the buy-in for Safrina
Speaker Change: and the versus in the mid-30s in the previous year, so it's relatively slower. There might be some of the demand shifting from...
Jenny Wong: So that's basically the situation. We have sold everything for our Q3; we're in full execution mode.
Unknown Executive: Okay, my thanks to that, Jenny.
Joel Jackson: My second question is kind of a two-part quick. Just at the beginning of the call, you talked about safety and time maintenance. I've got a lot of questions on that. Would you elaborate a bit more?
Joel Jackson: My second question will be kind of a two-parter, real quick. Just at the beginning of the call, you talked about safety and some incidents. I'm getting a lot of questions on that.
Joel Jackson: Could you elaborate a bit more? And then, second question, just quickly talk about phosphate production improving in Q4 versus Q3. Do you think you can get to that two million ton quarterly run rate in Q4, Bruce?
Joel Jackson: And then second question, quickly, tough-to-low phosphate production to improving Q4 versus Q3. Do you think you can get to that 2 million ton quarterly run rate in Q4 versus?
Joel Jackson: Yeah, Joel. Thanks for the additional questions.
Bruce Bodine: Yeah, Joel, thanks for the questions. I don't know if there are any additional questions, but the safety incident in the, Not that it matters, but it did get headline news, and I just wanted to be very transparent about that. It is something that, you know, has worse outcomes for us as, you know, industrial operators.
Speaker Change: Do you think you can get to that 2 million ton quarterly run rate in Q4, Bruce?
Bruce Bodine: Yeah, Joel, thanks for the
Bruce Bodine: But the safety incident, we had a serious incident at New Wales recently. Actually, it was a fatality. It didn't matter, but it did get headline news and just wanted to be very transparent about that. It's something that is worse outcomes for us as industrial operators. And, as we said, take that very seriously. And there'll be lessons learned and shared across the entire geography with that.
Bruce Bodine: You know it did
Speaker Change: Not that...
Speaker Change: It matters, but it did get headline news and just wanted to be very transparent about that.
Speaker Change: It's something that...
Speaker Change: You know, his worst outcomes for us as, you know, industrial operators, and as we said,
Speaker Change: take that very seriously and
Bruce Bodine: But we feel for the families and those impacted by any incidents that we have of seriousness within Mosaic.
Bruce Bodine: And as we said, take that very seriously, and there'll be lessons learned and shared across the entire geography with that. But... On the phosphate ramp-up return to production, Louisiana is also ramping up, had a decent quarter, but still more to go as we've got some more work to do there in the back half of the year. And then Riverview with the brush fire that we've talked about before, and then the conversion of the one large granulation plant over to microessentials and ramping that production up has kind of hurt that operating rate in quarter two.
Speaker Change: but
Speaker Change: We feel for the families and those impacted by any incidents that we have of seriousness within Mosaic.
Bruce Bodine: On the phosphate ramp up and return to production, we're, as you saw, a quarter one to quarter two definitely demonstrating results. I think, you know, one of the slides we have in earnings material and the presentation kind of hopefully shows a little more color on how we're progressing. As we said, Bartow and New Wales have shown good signs due to the investments that we've made there. And finally catching up on the turn arounds, even going back to COVID, as we've talked about in several calls before. Louisiana is also ramping up. Had a decent quarter, but still more to go as we've got some more work to do there in the back half of the year.
Speaker Change: On the phosphate ramp-up and return to production,
Speaker Change: As you saw, quarter one to quarter two, definitely demonstrating results. I think one of the slides we have in our earnings material.
Speaker Change: Louisiana is also ramping up and it had a decent
James ORourke: Unknown Executive, James ORourke
Bruce Bodine: And then Riverview with the brush fire that we've talked about before. And then the conversion of the one large granulation plan over to micro essentials and ramping that production up is kind of hurt that operating rate in quarter two. But still more work to do in the second half of the year that we have planned. But definitely optimistic that in aggregate, with the work that we have teed up and the demonstration that we've seen at New Wales and Bartow, that we're well on our way to kind of hitting that historical runway that we've talked about and confident that we'll get there.
Speaker Change: Ramping that production up has kind of hurt that operating rate in quarter two.
Bruce Bodine: But still more work to do in the second half of the year that we have planned. Definitely optimistic that, in aggregate, with the work that we have teed up and the demonstration that we've seen at New Whales and Bartow, we're well on our way to kind of hitting that historical run rate that we've talked about, and confident that we'll get there, Joel.
James ORourke: But still more work to do in the second half of the year that we have planned.
Joel Jackson: But definitely optimistic that, in aggregate, with the work that we have teed up and the demonstration that we've seen at New Whales and Bartow, that we're well on our way to kind of hitting that historical runway that we've talked about, and confident that we'll get there.
Bruce Bodine: Joel.
Stephen Byrne: The next question comes from Steve Byrne from Bank of America.
Operator: The next question comes from Steve Byrne from Bank of America. Please go ahead.
Stephen Byrne: Please go ahead. Thanks, Bruce. I'd like to drill into your outlook for potash fundamentals. You raised your global or your shipments for the year of bits, but we've had a couple of years that were really low. I guess my question is, do you have a view on whether inventory levels in the world are roughly back to normal or are so nutrient levels relatively back to normal? And if not, why do you think pricing here is roughly the same as they were in 2019? And yet we've got 40% of global supply; the sanctions. Are you getting, are you getting a value proposition out of camp attacks?
Speaker Change: The next question comes from Steve Byrne from Bank of America. Please go ahead.
Stephen Byrne: Thanks, Bruce. I'd like to drill into your outlook for potash fundamentals. You raised your global or your Why do you think pricing here is roughly the same as it was in 2019, and yet we got 40% of global supply? The things, Are you getting a value proposition out of CAMP ATT&CK?
Steve Byrne: Thanks Bruce. I'd like to drill into your outlook for potash fundamentals. You raised your global or your
Steve Byrne: We've had shipments for the year a bit, but we've had a couple of years that were really low. I guess my question is, do you have a view on
Speaker Change: Whether inventory levels in the world are roughly back to normal, or are soil nutrient levels relatively back to normal, and if not,
Speaker Change: Why do you think pricing here is roughly the same as they were in 2019 and yet we got 40% of global supply with sanctions?
Speaker Change: Are you getting...
Speaker Change: Are you getting a value proposition out of CAMP ATT&CKS?
Bruce Bodine: Yeah, Steve, that's a pretty complicated question. I mean, maybe it's just easier to back up and how we see the overall potash market. I mean, first on supply, although, yes, you're right sanctions exist on products, particularly in the FSU, Belarus particularly, but we're seeing trade flows have just been shifted around. They're getting their product out. There's been a large rebound both in Russia and Belarus this year versus last year, but it's been progressing over the last couple of years. So those tons are available. They're just hitting the geographies given the restrictions that they have on markets that they can participate in.
Speaker Change: Yeah, Steve, that's a pretty complicated question. I mean, maybe it's just easier to back up in how we see the overall potash market. I mean, first on supply,
Speaker Change: Although, yes, you're right, sanctions exist on, you know, products, particularly in the
Speaker Change: FSU, Belarus particularly, but we're seeing trade flows have just been shifted around. They're getting their product out. There's been a large rebound both in Russia and Belarus.
Speaker Change: This year versus last year, but it's been progressing over the last couple of years. So those tons are available. They're just hitting the geographies given the restrictions that they have.
Bruce Bodine: They're just taking larger share and closer to home markets. You know, think about Belarus is doing it with rail into China, but it's coming at a cost to serve for them, which is probably raising the umbrella on how low potash prices could ultimately go by 40 to 50 bucks versus historical numbers, just given the type of logistics gymnastics they have to do to get into the markets that are available to them. But, you know, there are several buyers; if you want to look at it that way, geographies that the sanctions don't really matter. You know, Brazil is going to buy from whoever they need to because they're a large importer.
Speaker Change: on markets that they can participate in, that they're just taking larger share and closer to home markets. You know, think about Belarus is doing it with rail into China. But it's coming at a cost to serve for them, which is
Bruce Bodine: probably raising the umbrella on how low potash prices could ultimately go by $40 to $50 versus historical numbers, just given the type of logistics and gymnastics they have to do to get into the markets that are available to them. But, you know, there are several buyers if you look at it that way, geographies where the sanctions don't really matter. Brazil is going to buy from whoever they need to because they're a large importer, and so again, it is simply just moving the trade flows around.
Speaker Change: Probably raising the umbrella on how low potash prices could ultimately go by $40 to $50 versus historical numbers, just given the type of logistics, gymnastics they have to do to get
Speaker Change: into the markets that are available to them.
Speaker Change: But, you know, there's several buyers, if you wanna look at it that way, geographies that the sanctions don't really matter. You know, Brazil's gonna.
Bruce Bodine: And so again, it is simply just move the trade flows around. And I think the supply side is much returned to where it was kind of before the sanctions. And then we're seeing demand as that supply has come back return as well, Steve. So you know, this year at 70 to 73 million ton outlook, it's going to be at or near record. So I think the nutrients are going down as the supply becomes more and more available. And then obviously, long term, unlike phosphates in potash, there are significantly announced expansions and greenfield mines coming on.
Bruce Bodine: And I think the supply side is much returning to where it was kind of before the sanctions. And then we're seeing demand as that supply has come back return as well, Steve. So you know, this year, at 70 to 73 million ton outlook, it's going to be at or near record. So I think the nutrients are going down as the supply becomes more and more available.
Speaker Change: Nobody is going to buy from whoever they need to because they're a large importer. So again, it is simply just move the trade flows around. And I think the supply side is much...
Speaker Change: Return to where it was kind of before the sanctions and then we're seeing demand as that supply has come back return as well Steve so you know this year at 70 to 73 million ton outlook it's going to be at or near record so I think the nutrients are going down
Speaker Change: As the supply becomes more and more available, and then obviously long-term.
Unknown Executive: And then obviously, long term, phosphates in potash, there are significantly announced expansions and greenfield mines coming on. And as growth in demand happens at Unknown Speaker Your, your, your P and K blended material that you sell? Or is this sold through a completely different channel?
Speaker Change: Unlike phosphates in potash, there are significantly announced expansions in greenfield mines coming on. And as growth in demand happens,
Jenny Wong: And as growth in demand happens at pick your number two to three percent compound annual growth rate, that demand is going to be needed. But it's probably going to keep prices in a more constrained zone than what you may see in, for instance, possibly. Jenny, I don't know if you have anything to add.
Speaker Change: Pick your number, 2-3% compound annual growth rate, that demand is going to be needed, but it's probably going to keep prices in a more constrained zone than what you may see in, for instance, phosphates.
Jenny Wong: You know, she's saying no, Steve, so I guess I got that one.
Speaker Change: Jenny, I don't know if you have anything to add.
Speaker Change: She's saying no, Steve. So I guess I got that one. Okay. Very good. Thank you. And I'd like to drill in just a little bit on the...
Steve Byrne: Thank you. And I'd like to drill in just a little bit on the biological that you're now selling. I believe that both are involved in nutrient uptake.
Speaker Change: The biologicals that you're now selling, I believe that both are involved in nutrient uptake. I guess my question for you on that is,
Steve Byrne: I guess my questions for you on that is, what is the business model of selling these biologicals? Are they effectively blended? Are they blended with your P&K blended material that you sell, or is this sold to a completely different channel? Just where do you see this, this business model going, and do those biologicals result in any reduction in the P&K application rates required on that land?
Speaker Change: What is the business model of selling these biologicals? Are they effectively blended with...
James ORourke: Unknown Executive, James ORourke
Speaker Change: Result in any reduction in the P&K application rates required on that land.
Bruce Bodine: Yes, Steve, thanks. First off, we're excited about biologics, and we see a lot of synergies with our distribution network, our customer relationships, the brand that we have, at least what we believe that we have in the marketplace for bringing higher performing products with real science and data back results to the market. And we think they're very complimentary to what we're currently selling, and I'm going to let Jenny get into a lot more of the details of that and unpack that a little bit more. But we see meaningful growth potential for these, and we think we have good products already in the market that are delivering significant yield results without impact to overall fertilizer application.
Bruce Bodine: Just just where do you see this, this business model going? And do those biological ones? Yes, Steve, thanks. First off, we're excited about Biologics, and we see a lot of synergies with our distribution network, our customer relationships, the brand that we have, or at least what we believe that we have in the marketplace for bringing higher performing products with real science and data-backed results to the market. And we think they're very complementary to what we're currently selling.
Speaker Change: Yes, Steve, thanks. First off, we're excited about biologics and we see...
Speaker Change: A lot of synergies with our distribution network, our customer relationships, the brand that we have, at least what we believe that we have in the marketplace for bringing higher-performing products with real science and data-backed results.
Jenny: to the market, and we think they're very complementary to what we're currently selling. And I'm going to let Jenny get into a lot more of the details of that and unpack that a little bit more. But we see meaningful growth potential for these. And we think we have.
Bruce Bodine: And I'm going to let Jenny get into a lot more of the details of that and unpack that a little bit more. But we see meaningful growth potential for these companies, and we think we have Sure, Bruce.
Jenny: Good products already in the market that are delivering significant yield results without
Jenny Wong: In fact, the two combines of one plus one equals more than two in this regard from a yield standpoint and really helps the story of how to help farmers or growers get more out of the same amount of acres of land. But Jenny's team has been doing a lot of work to develop launch programs in the various geographies that we talked about in some of our pre-recorded comments.
Jenny: impact to overall fertilizer application and in fact
Jenny: The two combined, so one plus one equals more than two in this regard, from a yield standpoint, and really helps the story of how to help...
Jenny: Farmers or growers get more out of the same amount of acres of land.
Jenny: Jenny's team has been doing a lot of work to develop, launch programs in the various geographies that we talked about in some of our pre-recorded comments. So I'll turn it over to Jenny to talk a little bit more about mechanisms, delivery, and any other salient points there.
Jenny Wong: So I'll turn it over to Jenny to talk a little bit more about mechanisms, delivery, and any other salient points there.
Jenny Wong: In terms of the go-to market for our bioscience products, firstly, as you can imagine, we go through our current customer base and current market access. Basically, the products are coated with fertilizer, dry fertilizer granulars. So that is one of the major go-to market approaches for our product. One of the major leading brands that we currently sell in America, North America, and Central America, Powercoat, is basically coated on the fertilizer granulars.
Jenny Wong: Sure. Steve, in terms of the go-to-market for our bio science products, firstly, as you can imagine, we go through our current customer base and the current market access. Basically, the products are coated with the fertilizer drop fertilizer granular.
Jenny Wong: Sure, Bruce. Hey, Steve.
Jenny: Sure, Bruce. Hey, Steve. In terms of the go-to market for our bioscience products, firstly, as you can imagine, we go through our current customer base and the current market access. Basically, the products are coated with the fertilizer drop, fertilizer granulars.
Jenny Wong: So that is one of the major go-to-market approaches for our product. One of the major leading brands that currently we're selling in the Americas, North America, Central America's power code, are basically coated on the fertilizer granular. We also have a current brand by pass, are sold as a stand-alone foliar application. So that usually can be mixed with fungicides and a second side.
Jenny: So that is one of the major go-to-market approach for our product. One of the major leading brands that currently we're selling in America, North America and Central America, Powercoat, are basically coated on the fertilizer granulars.
Jenny: We also have a current brand bypass are sold as a stand-alone foliar application. So that usually can be mixed with fungicide and insecticide. So when the farmers are treating their crops.
Jenny Wong: So when the farmers are trading their crops, as you all know, that we have invested in the next generation nitrogen fixation product. That product is likely going to go with seed coating as the go-to-market approach, which is going to give the highest efficacy and the lowest cost. And we're working with several major seed companies on that front. And hopefully we can provide more updates in the near future.
Jenny Wong: As you well know, we have invested in the next generation nitrogen fixation product. That product is likely going to go with seed coating as the go-to-market approach, which is going to give the highest efficiency and the lowest cost. And we're working with several major seed companies on that front, and hopefully, we can provide more updates in the near future. Thanks.
Jenny: As you well know that we have invested in the next generation nitrogen fixation product.
Jenny: That product is likely going to go with seed coating.
Jenny: as the go-to-market approach, which is going to give the highest efficiency and the lowest cost. And we're working with several major seed companies on that front, and hopefully we can provide more updates in the near future. Thanks.
Unknown Executive: In the interest of time, we will now be only taking one question per question.
Speaker Change: In the interest of time, we will now be only taking one question per questioner. And our next question comes from Richard Garchitorena from Wells Fargo. Please go ahead.
Richard Garchitorena: And our next question comes from Richard Garchitorena from Wells Fargo.
Richard Garchitorena: Please go ahead. Great. Thanks for answering my question.
Richard Garchitorena: Just wanted to touch on potash and what you're doing with Clancy and turn around at Esther Haney. Can you basically quantify in terms of how much long Esther Haney will be down during the quarter. And then also related to that, Clancy being restarted. So this is essentially link capacity just to replace that lost time is during the turnaround. Any associated costs with that. And, and how do you expect cost to be impacted in three to you? And then into four to, I guess, do we go back to the normal sort of portfolio of Esther Haney?
Richard Garciaturena: Great, thanks for answering my question.
Richard Garciaturena: Just wanted to touch on Potash and what you're doing with Glance and the turnaround at Esterhazy.
Speaker Change: Can you basically quantify in terms of how long Esterhazy will be down during the quarter?
Speaker Change: Also related to that, Colonce being restarted. So this is essentially twin capacity just to...
Speaker Change: replace that lost-punish during the turnaround. Any associated costs with that?
Speaker Change: And how do you expect cost to be impacted in 3Q and then into 4Q, I guess, do we go back to the normal sort of portfolio of SRA, the bulk capacity for production? Thanks.
Bruce Bodine: The bulk capacity, the bulk capacity for production. Thanks. You know, Richard, thanks. We do have, as you know, the scheduled turnaround, as you mentioned, the Esther Haney. You know, right now it's roughly a month. And that'll, you know, be plus or minus a few days based on discoverables as they get into pieces of equipment and things like that as always. But, as we talked about, based on the capacity comparison, you have to run Clancy about five months to offset one month of Esther Haney production. So, Clancy likely is going to run much of the remainder of the year to provide that volume offset, exactly as you said.
Unknown Executive: Richard, thanks. In those times when we do maintenance turnarounds, from a cost standpoint, we prefer to run Bellplane and Esterhazy first, as those are our two low-cost, solidly low-cost producers here in North America. Collance is higher in cost, so there's likely going to be some cost effect on the production cost during the times that that's running, but we've made significant improvements over time in Collance and stripped off costs there, so the incremental cost is not going to be that significant from an overall unit cost standpoint. So I'll leave it there, Richard, and move on to the next question, if time permits.
Richard Garciaturena: Richard, thanks.
Speaker Change: We do have, as you know, the scheduled turnaround, as you mentioned, at Astra-AZ, you know, right now it's roughly a month, and that'll, you know, be plus or minus.
Speaker Change: a few days based on discoverables as they get into
Speaker Change: pieces of equipment and things like that, as always. But as we talked about, based on the capacity comparison
Speaker Change: You have to run Colonce about five months to offset one month of Esterhazy production, so Colonce likely is going to run much of the remainder of the year to provide that volume offset, exactly as you said.
Bruce Bodine: Clancy, as we've demonstrated before and as we talked about, is our flexible tonnage to do exactly that: to look at the market needs overall and make sure that we can meet our commitments. And then to serve as backup, for instance, is like this where we need to make sure product is in our warehouses in position to meet international demand or domestic demand in those times where we do maintenance turnaround from a cost standpoint. We prefer to run always bell playing in Esther Haney first, as those are our two low-cost, solidly low-cost producers here in North America.
Speaker Change: Kovertakopoulos Fridays 10 am to 5 pm
Speaker Change: As we've demonstrated before and as we've talked about is our flexible
Speaker Change: Tonnage to do exactly that. To look at the market needs overall and make sure that we can meet our commitments and then to serve as backup for instances like this where we need to make sure product
Speaker Change: is in our warehouses in position to meet international demand or domestic demand.
Speaker Change: In those times where we do maintenance turnaround from a cost standpoint.
Speaker Change: We prefer to run, always, Bellplane and Esterhazy first, as those are our two low-cost, solidly low-cost producers here in North America.
Bruce Bodine: Clancy is hiring costs, so there's likely going to be some cost effect on production cost during the times that that's running. But we've made significant improvements over time in Clancy and stripped of cost there, so the incremental cost is not going to be that significant from an overall unit cost standpoint.
Speaker Change: Colonce is higher in cost, so there's likely going to be some cost.
James ORourke: Unknown Executive, James ORourke
Bruce Bodine: So I'll leave it there, Richard, and move on to the next question, given time.
James ORourke: So I'll leave it there, Richard, and move on to the next question, given time.
Adam Samuelson: The next question comes from Adam Samuelson from Goldman Sachs. Please go ahead. Thank you. Morning everyone. Bruce, in your comparison marks, you alluded to foster shipping margins remaining well above historical averages and expected to remain so. Just given some of the cost dynamics within your own foster business and some of the actions you're taking.
Speaker Change: The next question comes from Adam Samuelson from Goldman Sachs. Please go ahead.
Speaker Change: Just give us some of the cost dynamics within your own faucet business and some of the actions you're taking.
Adam Samuelson: Would you, how big of a gap would accurate input prices and current gap prices? How big of a gap do you see in terms of your realized when a gross margin per ton or even the upper time versus what the stripping margins reflect? And if I give you a specific question on the quarter, your ammonia costs in COGs went up sequentially, despite more internal ammonia production, which is the cheapest in your, that you could buy natural gas has gone down and Tampa ammonia prices really had tried to lower through second quarter and really haven't moved all that much.
Speaker Change: Would you, how big of a gap would, at current...
Adam Samuelson: Input prices and current DAP prices, how big of a gap do you see in terms of your realized, whether gross margin per ton or EBITDA per ton?
Unknown Executive: versus what the stripping margins reflect. And if I could ask a specific question about the quarter, your ammonia costs in COGS went up sequentially despite more internal.
Speaker Change: versus versus what the stripping margins reflect. And if I give us a specific question on the quarter, your ammonia costs in cogs went up sequentially despite more internal.
Speaker Change: Ammonia production which is the cheapest that you could buy. Natural gas has gone has gone down and Tampa ammonia prices really had treaded lower through second quarter and really haven't moved all that much. So please provide clarity on why the ammonia cost would have gone up sequentially.
Adam Samuelson: So he's probably clarity on why the ammonia costs have gone up sequentially.
Bruce Bodine: Hey, no. Thanks for the question. Let me, maybe answer a little bit. Well, differently. We actually are realize stripping margins are higher than benchmark stripping margins. And that's something that probably doesn't have a lot of insight as we don't report on that. But because of exactly what you just said, is our ammonia cost advantages with our long term CF contract, as well as, you know, up to a third internal production at Faustina at producer economics. And then just our buying power for sulfur and even ammonia that's left on spot, it gives us a pretty good advantage, given the geography where we import those, those raw materials as well.
Speaker Change: Thanks for the question. Let me maybe answer a little bit.
Unknown Executive: Actually, our realized stripping margins are higher than benchmark stripping margins. I'd say we are very much on trajectory for the kind of goals you've been laying out. Phosphate stripping margins are looking a little bit higher.
Speaker Change: Well, differently,
Speaker Change: We...
Speaker Change: Actually, our realized stripping margins are higher than benchmark stripping margins. And that's something.
Speaker Change: that probably don't have a lot of insight as we don't report on that, but because of exactly what you just said is our ammonia cost advantages.
Speaker Change: With our long-term CF contract, as well as, you know, up to a third internal production at Faustina, at Producer Economics.
Speaker Change: And then just our buying power for sulfur.
Speaker Change: And even ammonia that's left on spot, it gives us a pretty good advantage given the geography where we import those raw materials as well. So, you know, it did go...
Bruce Bodine: So, you know, it did go up on ammonia costs, as you said, Adam, in Q2. And that's really because in Q1, our ammonia plant was down for turnaround for much of what we're doing. Q1 where we did have more spot going into inventory. And that's just actually that raw material ammonia flowing through inventory from Q1 into Q2. So the benefits of running more in Q2, you'll start to see those in Q3.
Speaker Change: Up on ammonia costs, as you said, Adam, in Q2, and that's really because in Q1
Adam Samuelson: Our ammonia plant was down for turnaround.
Adam Samuelson: for much of quarter one, where we did have more spot going into inventory.
Adam Samuelson: And that's just, actually, that raw material, ammonia flowing through inventory.
Adam Samuelson: from quarter one into quarter two. So the benefits of running more in quarter two, you'll start to see those in quarter three. So I hope that answers the bulk of your question in a little different way.
Bruce Bodine: So, I hope that answers the bulk of your question in a little different way.
Christopher Parkinson: The next question comes from Chris Parkinson from Wolf Research. Please go ahead. Great. Thank you so much for taking my question. So, you know, Bruce, you know, your execution is, I'd say, very much on trajectory for kind of the goals you've been laying out. Faustina stripping margins are looking a little bit higher. The cost curve is a little bit steeper than people have been anticipating. Balance sheets in a great condition.
Adam Samuelson: The next question comes from Chris Parkinson from Wolf Research. Please go ahead.
Chris Parkinson: All right, thank you so much for taking my question. So, you know, Bruce, you know, your execution is.
Chris Parkinson: I'd say very much on trajectory for kind of the goals you've been laying out. Phosphate stripping margins are looking a little bit higher. The cost curve is a little bit steeper than people have been anticipating. Balance sheet's in great condition. I mean, what else
Bruce Bodine: I mean, what else do you think needs to be done to re-engage investors? Is it just, is it your belief that further executions the key, you know, proving out your thesis in the context of low crop prices? Just what would be your, you know, kind of two cents on current market dynamics right now? Thank you.
Speaker Change: What do you think needs to be done to re-engage investors? Is it just, is it your belief that further execution is the key, you know, proving out your thesis in the context of low crop prices? Just what would be your, you know, kind of two cents on current market dynamics right now?
Bruce Bodine: Yeah, I mean, I agree. Chris, and thanks for the question. The market fundamentals, as we talked about, appear to be strong and just don't see anything, you know, out there that's going to be a big derailer. But to your point, why are we not getting maybe more credit given how much we're leveraged into phosphates? I think it is on execution and delivering those results. Yes, we're making progress, and I appreciate the commentary because we feel good about how we're executing on our strategy. But we do still have a lot to go in the back half of the year, and to see that kind of 8 million ton, 7.8 to 8.2 million, you know, ton runs.
Speaker Change: Yeah, I mean, I agree, Chris, and thanks for the question that in market.
Speaker Change: Fundamentals, as we talked about, appear to be strong
Speaker Change: Out there, that's going to be a big derailer.
Speaker Change: But to your point, why are we not getting maybe more credit given how much we're leveraged into phosphates?
Speaker Change #100: I think it is on execution and delivering those results.
Speaker Change #101: Yes, we're making progress and I appreciate the commentary because we we feel good about how we're executing on our strategy But we do still have a lot to go in the back half of the year and to see that kind of eight million ton
Bruce Bodine: On rate of going into 2025, we still got to deliver upon that. And with that, as you well know, comes significant cost absorption. And those cost absorption numbers aren't even in our cost savings as of right now. And we'll reconcile that report on that on an annualized basis because it's just too much noise from quarter to quarter.
Speaker Change #101: 7.8 to 8.2 million, you know, ton run rate going into 2025, we still got to deliver upon that. So, and with that, as you well know, comes significant cost absorption. And those cost absorption numbers aren't even in our.
James ORourke: Unknown Executive, James ORourke
Bruce Bodine: So I think it is on execution. I think the other thing is, and maybe Jenny, if you've got any comments here, but is that people just think China is going to open up some magic floodgate on export. And we just don't see it that way based on the intelligence and the people we have in country. As Jenny has talked about, we're seeing very good demand domestically in China on phosphate for agriculture, given their focus on food security. And then you can't ignore the fact that LFP on the industrial side is making significant growth. And it's somewhat cannibalizing other available agricultural P205.
James ORourke: And maybe Jenny, if you've got any comments here, but is that people just think China is going to open up some magic floodgate on export. And we just don't see it that way based on the intelligence and the people we have in country.
James ORourke: As Jenny has talked about, we're seeing very good demand domestically in China on phosphate for agriculture, given their focus on food security.
Speaker Change #102: And then you can't ignore the fact that LFP on the industrial side is making significant
Speaker Change #103: Unknown Speaker 05.05.16 Transcription by CastingWords Transcription by CastingWords
Speaker Change #104: and is somewhat cannibalizing other available agricultural P205. So, again, I don't know what it's going to take for people to believe in that, but I think this year demonstrates just how that policy in China is impactful.
Bruce Bodine: So again, I don't know what it's going to take for people to believe in that. But I think this year demonstrates just how that policy in China is impactful. Yeah, OCP may be exporting a little bit more, but the fact that China is exporting that much less kind of neutralizes that. So we just see very constructive fundamentals and phosphates. Maybe people just got to see it for a little bit longer, and no doubt we got to demonstrate on what we've said we can execute and control.
Speaker Change #105: Yeah, OCP may be exporting a little bit more, but the fact that China is exporting that much less kind of neutralizes that. So we just see very constructive fundamentals in phosphates.
Speaker Change #105: Maybe people just got to see it for a little bit longer, and no doubt we've got to demonstrate on what we've said we can execute and control.
Benjamin Theurer: The next question comes from Ben Thur from Barclays.
Benjamin Theurer: Please go ahead. Yeah, good morning, and thanks for taking my question. Just wanted to quickly get your thoughts on fertilisantes for the second half. You clearly had a very strong first half in terms of like the distribution margin; your guiding for the historical range, like being in there. We don't like the puts and takes that could potentially take you higher.
Speaker Change #105: The next question comes from Ben Thurr from Barclays. Please go ahead.
Ben Thurr: Yeah, good morning and thanks for taking my question. Just wanted to to quickly get your thoughts on Fertilis Antis for the second half. You clearly had a very strong first half in terms of like the distribution margin you're guiding for the historical range, like being in there. What are like the puts and takes that could potentially take you higher and if you could give us a preliminary preview as you think about the fourth quarter for the profitability at Fertilis Antis.
Bruce Bodine: And if you could give us a preliminary preview as you think about the fourth quarter from a profitability at fertilisantes. Thanks.
Jenny Wong: I'll start maybe at a high level in Jenny, turn it over to fill in a little bit more details, but you know, we're very optimistic about the second half of the year in fertilisantes. I mean, just at a high level, again, is just to reiterate kind of how we see this business is, you know, 9 million tons distribution historically growing to 10 from a volume standpoint, 30 to $40 distribution margin, about $100 million of EBITDA contribution on co-products on an annualized basis. And maybe something we haven't talked about, but publicly, but as much it's available in our information, but I think it's worth highlighting is that there's another $100 million there about of SG&A costs that kind of you got to take off the top.
Ben Thurr: Thanks.
Jenny: I'll start maybe at a high level and Jenny turn it over to fill in a little bit more details but you know we're very optimistic about the second half of the year in fertilizantes.
Jenny: I mean, just at a high level, again, just to reiterate, kind of how we see this business is, you know, nine million tons distribution.
Jenny: Historically growing to 10 from a volume standpoint.
Jenny: $30-$40 Distribution Margin
Jenny: About a hundred million dollars of EBITDA contribution on co-products on an annualized basis and maybe something we haven't talked about but publicly but
Jenny: Unknown Executive, James ORourke, Unknown Executive, James ORourke,
Bruce Bodine: So, you know, throw all that together. You can do the math on what you think volumes are going to be quarter by quarter based on historical performance or whatever you do.
Jenny Wong: You can do the math on what you think volumes are going to be quarter by quarter based on historical performance or whatever you do, but given the demand in Brazil, we see good returns and EBITDA contribution out of Fertilizantes in the second half of the year. Jenny
Speaker Change #107: You can do the math on what you think volumes are going to be quarter by quarter based on historical performance, or whatever you do. But given the demand in Brazil, we see
Jenny Wong: But given the demand in Brazil, we see good returns and even a contribution out of fertilisantes in the second half of the year, Jenny.
Operator: Thanks, Jenny. The only other thing maybe to think about is FX tailwinds. I mean, with the FX movement over the last month or so, it's definitely providing some tailwinds to our operating costs that are REI based. So that should help with the margin expansion as well. The next question comes from Edlain Rodriguez from Mizzouho. Please go ahead.
Bruce Bodine: Yeah, I guess your question specifically on Q4. I just want to say for Q3 repeat, we have solid self-book that we're executing upon. The volume is historically, as historically, Q3 is the highest quarter. And the growth margin per ton is at the $30 to $40 range for Q4, depending on how the market is going to move from the second half of Q4 into the first half of Q1. There might be some shift on the volumes. And also want to remind Q4 is the freiner season, where nitrogen has a much higher percentage in the total market, which we participate a little bit less than the suffer season.
Bruce Bodine: So that's a reminder.
Bruce Bodine: Thanks. Thanks, Jenny.
Bruce Bodine: The only other thing maybe to think about is FX tailwinds. I mean, with the FX movement over the last month, several weeks, there's definitely providing some tailwinds to our operating costs.
Bruce Bodine: That are re-i-based. So that should help on the margin expansion as well.
Edlain Rodriguez: The next question comes from Ed Lane Rodriguez from Mizzouho.
Edlain Rodriguez: Please go ahead. Thank you.
Bruce Bodine: Good morning, everyone. I mean, just I mean, boosts our Jenny.
Bruce Bodine: Just a quick question on the resilience of phosphate price. How do you see that playing out in terms of the disconnect between PNK prices? Like, does that gap now by P coming down or K going up? Because it doesn't seem like that gap can continue forever? Thanks for your question. I don't know that our crystal ball is any better than yours. And I think it just in Jenny, please help, but you go back to the fundamentals. I just think the supply and demand fundamentals on the global scale are different between those two commodities. And just because they are divergent today doesn't mean they need to converge.
Speaker Change #108: Just because they are divergent today it doesn't mean, they need to converge them. It would be my thoughts on this.
Bruce Bodine: It would be my thoughts on this. It's very much going to be those two commodities independently. What is going on from a supply and demand standpoint? We know what the crops need. It comes down to supply. Supplies probably got a more announced, as I said earlier, on potash and what can come to the market over the next decade. In phosphates, it's just not as clear as what is going to be a catalyst to bring to your point pricing down. So, in the meantime, we're optimistic on P. Don't see prices with a lot of risk there.
Speaker Change #108: It's very much going to be those two commodities independently what is going on from a supply and demand standpoint, we know what the crops need.
Speaker Change #108: It comes down to supply supply has probably got a.
Speaker Change #108: You know more announced as I said earlier on on potash.
Speaker Change #108: And what can come to the market over the next decade in.
Speaker Change #108: In phosphates, it's just not.
Unknown Executive: as clear as what is going to be a catalyst to bring, to your point, pricing down. So, in the meantime, we're optimistic on P. We don't see prices with a lot of risk there. And on K, I think the zip code of where prices are today is pretty solid for the foreseeable future. There may be some seasonal upticks here and there and from year to year, but I don't see any dramatic change in K moving up or P moving down just because they're divergent. Looks like Jenny doesn't have anything to add.
Speaker Change #108: As clear as what is going to be a catalyst to bring to your point pricing down. So in the meantime, we're we're optimistic on P don't see prices.
Speaker Change #108: With a lot of risk there and on K I think the ZIP code of where prices are today is is pretty solid for the foreseeable future. There may be some seasonal uptick here and there and from year to year, but I don't see some dramatic change in K moving up or P. Moving down just because there are diverging.
Bruce Bodine: And on K, I think the zip code of where prices are today is pretty solid for the foreseeable future. There may be some seasonal uptick here and there, and from year to year, but I don't see some dramatic change in K moving up or P moving down just because they're divergent today.
Jenny Wong: Jenny.
Jenny Wong: Looks like Jenny doesn't have anything to add.
Speaker Change #108: Today.
It looks like Jenny doesn't have anything to add.
Operator: The next question comes from Josh Spector from UBS. Please go ahead.
Joshua Spector: The next question comes from Josh Spector, from UBS. Please go ahead. Thank you.
Speaker Change #108: The next question comes from Josh Spector from UBS. Please go ahead.
Lucas Beaumont: Thank you, this is Lucas Beaumont, I'm on behalf of Josh. I just wanted to go back to your comments kind of on the conversion costs of phosphates. So, I mean, they're down kind of 15% from the end of the year, but year on year, they're only down sort of about $5 a ton, or 5%. And you're still kind of running at about $100 a ton currently. If we go back to like 2018, 2019, when you used to produce the 8 million ton run rate, that was about 65.
Lucas Beaumont: This is Lucas Beaumont on the Josh. I just sort of go back to your comments, kind of on the conversion costs in plus fights. I mean, they're down kind of 15% from the end of the year. But you're on either only down sort of about $5 a ton or 5%. And you're still kind of running at about $100 a ton currently. We go back to like 2018, 2019, when we used to produce the 8 million ton run rate. That was about 65. So, I mean, we know there's going to be benefits there as you sort of get back up to that run rate, be it the end of this year or sometime on the 25.
Speaker Change #108: Thank you. This is Lucas Beaumont answer Josh I, just wanted to get back to your comments kind of on the conversion cost in phosphates.
Lucas Beaumont: They're down kind of 15% from the end of the year.
Speaker Change #110: Year on year, they were only down sort of of that soft all of the time, it's hard to say it.
Speaker Change #111: And you're still kind of running at about $100. A ton currently to go back to like 20, I changed 2019, when used to produce the 8 million ton run rate that was about 65.
Lucas Beaumont: So, I mean, we know there's going to be benefits there as you sort of get back up to that run rate, be it the end of this year or sometime in 2025. But can you kind of help us think about where the kind of range there that you're thinking about is? Is it, you know, $90 or $80? How should we sort of frame that out?
I mean, we know there's going to be benefits there as you sort of get back up to that run rate.
Speaker Change #111: The end of this year or sometime in 'twenty five.
Lucas Beaumont: But can you kind of help us think about where is kind of the range there that you're thinking about? Is it, you know, $90 or $90? Actually, we sort of find that out. Thanks.
Speaker Change #112: But can you kind of help us think about where is the range that youre thinking about is that you know $90 alrighty.
Speaker Change #112: How should we sort of frame that up.
Speaker Change #112: Okay.
Bruce Bodine: Yeah, thank you, Lucas. Definitely, I don't definitely see that as volume improves, that fixed cost absorption. And there's other benefits, like electricity generation, that we've talked about; rather than buying third party, we will produce more of our own internal power that we generate and reap the benefits there.
Unknown Executive: Yeah, thank you, Lucas. Definitely, I definitely don't see that as volume improves that fixed cost absorption. And there are other benefits like electricity generation that we talked about, rather than buying third-party power, we will produce more of our own internal power that we generate and reap the benefits there. But overall, kind of from that historical high, we see a 20 to $30 reduction in total cost when we get back to that 65 to 70 number. I listen, the inflation that we've seen overall across the globe, and the United States is no different, and our operations are no different I don't see getting back to those numbers, but we should definitely see further improvement, maybe another $20 down from where we are right now, as we get to that historical run.
Lucas Beaumont: Yeah, I think Lucas.
Lucas Beaumont: Definitely I don't.
Speaker Change #113: Definitely see that as volume improves that fixed cost absorption and there's other benefits like electricity generation that we talked about rather than buying third party will produce more of our own internal powered that we generate and reap the benefits there, but overall kind of from that historical high would we see a 20 to $30 reduction in total cost.
Bruce Bodine: But overall, kind of from that historical high, we see a $20 to $30 reduction in total cost. When we get back to that $65, $70 number, listen, the inflation that we've seen overall across the globe in the United States is no different, and our operations are no different. I don't see getting back to those numbers, but we should definitely see further improvement. Maybe another $20 down from where we are right now. As we get to that historical run rate.
Speaker Change #113: Well, we get back to that $65 $70 number.
Speaker Change #114: Listen the inflation that we've seen overall across the globe in the United States is no different and our operations are no different I don't see getting back to those numbers, but we should definitely see further improvement maybe another $20 are down from where we are right now as we get to that historical run rate.
Andrew Wong: The next question comes from Andrew Wong from RBC Capital Markets.
Operator: The next question comes from Andrew Wong from RBC Capital Markets. Please go ahead.
Speaker Change #114: The next question comes from Andrew Wong from RBC Capital markets. Please go ahead.
Andrew Wong: Please go ahead. Thank you, Maureen. Thanks for your question.
Andrew Wong: Good morning, thanks for asking our question. So with expansion after HAZ is set for mid 2025, do you I still anticipate needing to keep Colonce kind of like on hot standby, and what's the cost to maintain that on standby, like if you permanently kind of shut that down, like what would be the cost savings, and just broadly on the potash strategy, like can you just talk about the rationale and maintaining supply flexibility, how you see that impacting buyer behavior, knowing that supply can just be available when they want it, Did it make more sense to maybe not have that excess capacity or flexibility available and maybe have a little bit more scarcity on it?
Andrew Wong: Hey, good morning.
Andrew Wong: So what's the extension that Mr. Vazis set for mid 2025? Do you still anticipate needing to keep, come on, say kind of like on hot standby? And what's the cost of maintaining that on standby? Like if you permanently kind of shut that down, like what would be the cost savings?
Andrew Wong: Yeah.
Speaker Change #116: So with expansion.
Speaker Change #117: For mid 2025 Teu.
Bill: Bill anticipate needing to keep colonsay kind of like on hot standby and what's the cost to maintain dot on standby.
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Bill: Permanently kind of shut that down like what would be the cost savings.
Bruce Bodine: And just broadly on the podash strategy, I can use talk about the rationale and maintaining supply effects of flexibility. How do you see that impacting buyer behavior? Knowing that supply can just be available when they want it and make more sense, and maybe not have that excess capacity or flexibility available. I mean, we have a little bit more scarcity on the front. Yeah, Andrew, I mean, we think that having Colonce as a flexible option for when the market demand is there and it intersects appropriately with shareholder value, that it does provide significant optionality to the upside for us.
Speaker Change #119: And just broadly on the potash strategy can you just talk about the rationale and.
Speaker Change #120: Maintaining supply effects of flexibility, how do you see that impacting buyer senior knowing that supply can just be available when they want it in.
Speaker Change #121: It makes more sense to maybe not have that.
Speaker Change #122: Excess capacity or flexibility available maybe helpful bit more scarcity of supply.
Unknown Executive: Yeah, Andrew, I mean, we think that having Colonce as a flexible option for when the market, demand, is there, and it intersects appropriately with shareholder value, that it does provide significant optionality on the upside for us. And we've demonstrated our responsibility to try to control that volume that we have based on the commitments that we have both to Campatex and to our customers in North America where we can. But the fact that we need to run it right now is because you take the big dog out of the equation for a month, and that's a lot of tonnage that we have to make up for. And just given the tightness of the market in the inventory, particularly on our side, we don't have enough inventory built up to be able to buffer that out.
Speaker Change #123: Yeah, Andrew I mean I I.
Speaker Change #123: I.
Andrew Wong: We think that having colon say as flexible option for when the market demand is there and it intersects appropriately with shareholder value and it does provide significant optionality to the upside for us and we've demonstrated.
Bruce Bodine: And we've demonstrated our responsibility to try to control that volume that we have based on the commitments that we have both to architects and to our customers in North America where we can. But the fact that we need to run it right now is because you take the big dog out of the equation for a month, and that's a lot of tonnage that we have to make up for. And just given the tightness in the market in the inventory, particularly on our side, we don't have inventory built up to be able to buffer that out.
Andrew Wong: Our responsibility to try to.
Speaker Change #124: Control that volume that we have based on the commitments that we have both to canpotex and to our customers in North America.
Speaker Change #124: Where we can but the fact that we need to run it right now is because you take the big dog out of the equation for a month and that's a lot of tonnage that we have to make up for and just given the tightness in the market and the inventory, particularly on our side. We don't have inventory built up to be able to buffer that out so kalana say it needs to come on.
Bruce Bodine: So Colonce needs to come on. How long it will come on as we always have said and always look at it is going to come down to what's going on in the marketplace. What do we believe it looks like for the future and that regard to your point and make our own opinions on that and does that intersect proper shareholder value at the same time. Right now, we're focused on through the end of the year. Colonce is probably going to have to run to offset yesterday's turnaround, but we will continue, as we always have, to monitor the best decisions for Mosaic and our shareholders and our customers and decide what to do with that going forward.
Unknown Executive: So Colonce needs to come on. How long it will come on, as we always have said and always look at, it is going to come down to what's going on in the marketplace. What do we believe the future looks like in that regard, to your point, and we'll make our own opinions on that. And does that meet proper shareholder value at the same time?
Speaker Change #125: How long it will come on as we always have said and always look at it it is going to come down to what's going on in the marketplace. What do we believe it looks like for the future in that regard to your point, we'll make our own opinions on that and does that intersect proper shareholder value at the same.
Speaker Change #125: Time.
Bruce Bodine: Right now, we're focused on through the end of the year. Colonce is probably going to have to run to offset the esterhazy turnaround. But we will continue, as we always have, to monitor the best decisions for Mosaic and our shareholders and our customers and decide what to do with that going forward. So with that, I think we're done with the call operator on the questions, and I'll just conclude that I'd like to reiterate just a couple key themes.
Speaker Change #125: Right now we're focused on through the end of the year Colonsay is probably going to have to run to offset the yesterday hazy turnaround but.
Speaker Change #125: But we will continue as we always have to monitor.
Speaker Change #125: The best decisions for mosaic and our shareholders.
Speaker Change #125: And our customers and decide what to do with that.
Speaker Change #125: Going forward.
Bruce Bodine: So, with that, I think we're done with the call operator on the questions, and I'll just conclude that I'd like to reiterate just a couple key themes.
Speaker Change #125: So with that I think we're done with the the call operator on the questions and I'll just conclude.
Speaker Change #125: That I'd like to reiterate just a couple of key themes. One is mosaic delivered solid second quarter results and operational performance, we are making steady progress on our strategic initiatives to grow the company manage costs and maximize returns.
Bruce Bodine: One is Mosaic delivered solid second-quarter results and operational performance. We are making steady progress on our strategic initiatives to grow the company, manage costs, and maximize returns. Fertilizer demand is robust around the world, and our market outlook remains constructive. And our overall outlook for the remainder of 2024 is positive. So, thanks everyone for joining our call, and have a great and safe day.
Bruce Bodine: One is Mosaic Delivered Solid, Second Quarter Results, and Operational Performance. We are making steady progress on our strategic initiatives to grow the company, manage costs, and maximize returns.
Bruce Bodine: Fertilizer demand is robust around the world, and our market outlook remains constructive, and our overall outlook for the remainder of 2024 is positive.
Speaker Change #125: Demand is robust around the world and our market outlook remains constructive and our overall outlook for the remainder of 'twenty 'twenty four is positive. So thanks, everyone for joining our call and have a great and safe day.
Unknown Executive: So thanks everyone for joining our call, and have a great and safe day.
Unknown Executive: The conference has now concluded. Thank you for attending today's presentation.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Speaker Change #126: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Unknown Executive: You may now disconnect. Thank you.
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Speaker Change #126: Okay.
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