Mosaic Company (the) · NYSE:MOS
Mosaic Company (the) — TFI Fertilizer Outlook & Technology Conference 2015
22 slides from Mosaic Company (the)'s conference presentation, Nov 12, 2015
Slide 1: Potash Outlook
Potash Outlook Andy J. Jung Director, Market and Strategic Analysis The Mosaic Company TFI Fertilizer Outlook & Technology Conference Jacksonville, FL November 11, 2015
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Wa’ad Al Shamal Phosphate Company (also known as the Ma’aden joint venture), the
Slide 3: Plant nutrient prices have been under pressure in 2015
Click to edit Master title style 3 Plant nutrient prices have been under pressure in 2015… MOP Jan 2015: $370 Current: $285 Change: -23% DAP Jan 2015: $481 Current: $423 Change: -12% Urea Jan 2015: $337 Current: $246 Change: -27% 100 200 300 400 500 600 700 05 06 07 08 09 10 11 12 13 14 15 Plant Nut
Slide 4: Lower prices underpin demand as crop nutrients become more affordable
Click to edit Master title style 4 …but these lower prices underpin demand as crop nutrients become more affordable More Affordable Less Affordable • Our plant nutrient affordability metric has bobbed and weaved with changes in agricultural commodity and plant nutrient prices, but the current readin
Slide 5: Key takeaway: More constructive fundamentals than the market is trading
Click to edit Master title style 5 Key takeaway: More constructive fundamentals than the market is trading, particularly with regard to K ▪ Ag commodity fundamentals remain positive − Cautious sentiment in the ag space appears to be driven as much by the contagion of the more dramatic downturns seen
Slide 6: Recap of Ag Commodity Markets: Prices remain at historically-elevated levels
Recap of Ag Commodity Markets: Prices remain at historically-elevated levels
Slide 7: Lower, but not a collapse of crop prices
Click to edit Master title style 7 Lower, but not a collapse of crop prices, and they have fared much better than other commodities 30 40 50 60 70 80 90 100 110 120 2014 2015 Index Source: CRB Commodity Prices 2014 Q1=100 Oil WTI Iron Ore Corn Soybeans HRW Wheat 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 0
Slide 8: Other prices provide some good and bad news
Click to edit Master title style 8 Other prices provide some good nd bad news 1750 2000 2250 2500 2750 3000 Jan '14 Jul '14 Jan '15 Jul '15 RM/ Tonne Palm Oil Price Daily Close of Nearby Futures Contract Source: Kuala Lumpur Exchange 9 10 11 12 13 14 15 16 Jan '14 Jul '14 Jan '15 Jul '15 CTS/LB Rice
Slide 9: Mostly weather-related volatility and not long term structural imbalance
Click to edit Master title style 9 Mostly weather-related volatility and not long term structural imbalance 606 579 494 407 469 461 424 436 512 569 550 539 525 592 637 636 16% 18% 20% 22% 24% 26% 28% 30% 300 350 400 450 500 550 600 650 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14E15F PercentMil Tonn
Slide 10: Potash Current Situation and Near Term Outlook
Potash Current Situation and Near Term Outlook
Slide 11: Potash prices soften in 2015
Click to edit Master title style 11 Potash prices soften in 2015 250 300 350 400 450 500 550 600 10 11 12 13 14 15 $ Tonne $ Ton Muriate of Potash Prices Blend Grade c&f Brazil Standard Grade c&f SE Asia NOLA Barge Source: Argus FMB ▪ Prices have been under pressure (but for reasons different than t
Slide 12: A long litany of market concerns
Click to edit Master title style 12 A long litany of market c ncerns ▪ Further declines in crop prices • Could there be more above-trend harvests • Prospects of a strong dollar for years to come • Fallout from China’s economic slowdown • Other macroeconomic/financial market turbulence • Flat biofuel
Slide 13: More constructive fundamentals than the market is trading
Click to edit Master title style 13 More constructive fundamentals than the market is trading ▪ Shipments expected to decline about 3.6 million tonnes in 2015 − The decline follows a massive 16% or 8.7 million tonne surge in 2014 to 62.7mmt − Modest declines in use expected in some countries this ye
Slide 14: Global capacity 'overhang' is overstated
Click to edit Master title style 14 Global capacity ‘overhang’ is overstated ▪ Less operational capacity today than most analyst estimates − Consultants’ estimates look way too high to us • e.g. Canadian capacity based on Canpotex proving runs, not operational capacity • Optimistic estimates for mos
Slide 15: Lower shipments this year but a decent rebound forecast for 2016
Click to edit Master title style 15 Lower shipments this year mainly due to large channel inventories but a decent rebound forecast for 2016 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E16F Mil Tonnes KCl Brazil MOP Shipments Source: CRU, Fertecon and
Slide 16: North America shipments pull back modestly, imports return to normal
Click to edit Master title style 16 North America shipments pull back modestly, while imports expected to return to historically normal level • NA MOP imports surged to over 1.7 million tonnes in 2014/15. Imports are forecast to drop to more normal levels due to lower U.S. prices (parity with other
Slide 17: Brazil volumes have eased back from record levels seen in 2014
Click to edit Master title style 17 Brazil volumes have eased back from record- shattering levels seen in 2014 0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 95 97 99 01 03 05 07 09 11 13 15 YTD Mil Tonnes Product Brazil Total Plant Nutrient Shipments Actual Forecast Source: ANDA, Mosaic • Total product ship
Slide 18: China's fertilizer VAT has not derailed MOP demand
Click to edit Master title style 18 China’s fertilizer VAT has not derailed MOP demand • China imposed a 13% VAT on all fertilizer sales effective September 1, 2015. However, only a 3% VAT was levied on product in inventory. The VAT combined with a ~3% currency devaluation is expected to result in a
Slide 19: India and Indonesia/Malaysia note
Click to edit Master title style 19 India and Indonesia/Malaysia note 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E16F Mil Tonnes India MOP Imports Calendar Year Source: FAI and Mosaic 0.0 1.0 2.0 3.0 4.0 5.0 6.0 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15E16F
Slide 20: Potash Long Term Outlook
Potash Long Term Outlook
Slide 21: Capacity increases outpace demand growth by smaller margins than forecast
Click to edit Master title style 21 Capacity increases do outpace demand growth, but by much smaller margins than many analyst forecasts 75.0% 77.5% 80.0% 82.5% 85.0% 87.5% 90.0% 92.5% 95.0% 97.5% 0 10 20 30 40 50 60 70 80 90 10 11 12 13 14 15F 16F 17F 18F 19F 20F Op RateMil Tonnes Source: Company R
Slide 22: Thank You!
Potash Outlook Andy J. Jung Director, Market and Strategic Analysis The Mosaic Company Thank You! TFI Fertilizer Outlook & Technology Conference Jacksonville, FL November 11, 2015
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