Bert Frost: Well, the good thing is it’s a global market. And you have — in a global market today, a lot of production in dispersed countries and also a lot of consumption in dispersed countries. And in a growing population, a growing need to feed the world and the benefits of nitrogen for pollution control, which are growing, not only in DEF but in power generation and with clean energy, you have demand. So, today, let’s just take urea. Today’s urea market is about 55 million tons of globally traded on a vessel out of about 190 million tons of production. And so when you look at China and our number of 4 million metric tons of possible exports, that’s less than 10%. If you look at India, and India has been a major player in the importation of urea and the support of the global urea price, but they’re falling from imports of 7 million to 9 million tons, and we’re projecting 5.5 million to 6.5 million.
So, that is being taken out of that global trade but the countries that are growing and Brazil is growing significantly, we project them to be 8 million tons. Just 15 years ago, that was around 3 million tons. So the countries that are increasing, Argentina, Australia, Brazil, Ethiopia, South Africa, Turkey, Thailand, those countries have grown this year in their urea consumption. The price of urea today at around $300 is highly attractive for agricultural and production control. The challenge, I think, for India — or excuse me, for China going forward is the export controls that are in place. And the new controls are such that you have to have prepayment, a shipment date, a destination, a product price and all that set up in a contract before applying for the CIQ application.
And then prepayment has to take place before the cargo moves to port. So, that’s a very difficult transactional structure to have China, I think, even hit the 4 million tons. And so I think we’re a little vague in our comments because it’s a little opaque right now in the market on how it’s going to develop. But China, I think, will play in the international market once the spring season is over. And then we’ll see how the pricing develops from there.
Ben Theurer: And then just a quick follow-up on that industrial versus agriculture use, the impact you had in the first quarter that shift towards the lower profitability on the industrial use just because of fulfilling those contracts. Has that already normalized now that we’re like early May. So, that was really just like kind of a onetime? Should we think about that volume balance to be more normal and not as skewed towards the raw ammonia because of the industrial needs?
Chris Bohn: Yes, as we talked about, a lot of the issues that occurred in Q1 were discrete to Q1 and that those are passed us both from a production and also a sales perspective. But as you mentioned, we did take 167,000 tons of what would normally have been upgraded to urea, which, as I said in my remarks, would be about 275,000 tons of urea. So, you see the urea decrease in sales and the increase we had in ammonia. But when you put that on a nutrient margin basis of what the quarter was for the industrial ammonia versus the ag urea, you’re looking at something that was almost about a $30 million margin impact. And that, combined with that $75 million of approximate maintenance expense really is what set the quarter back. But again, can emphasize enough that those are discrete items to Q1.
Ben Theurer: Okay, perfect. Thank you very much.
Operator: Thank you. The next question comes from Richard Garchitorena with Wells Fargo. Please go ahead.
Richard Garchitorena: Great. Thanks for taking my questions. I just wanted to ask about Waggaman. You mentioned that the facility had some downtime from weather in January. I was wondering if you can give us an update in terms of how the ramp-up has been since you close the acquisition, integration of that asset into your facilities? And have you been able to get utilization rates up to sort of typical CF average levels as it was maybe lower than that prior to your ownership?
Tony Will: Yes, you bet. So, we had an outage and we took that opportunity to conduct the turnaround that was kind of scheduled for later in the year. And so we were able to take advantage of that downtime. But prior to that and in fact, post turnaround we’re operating at rates that reflect north of what nameplate capacity has been on that or is on that unit. And so that reflects kind of more traditional operating rates for CF across our network. And I’d say the integration has gone remarkably well. The team at Waggaman has worked extremely well with the rest of the CF network. And I think it’s that kind of partnership and coordination that has led to some of the improvements we’ve made in terms of onstream factor and operating rate at the location.
So, we couldn’t be more happy about the acquisition and in fact, particularly at the value of it, given where new assets look like they’re trading and what the cost of new construction is. So, we’re really pleased with adding Waggaman into the portfolio.
Richard Garchitorena: Okay, great. And then just on the press release on the JDA with JERA. I’m just curious in terms of — so if capacity ends up being 1.4 million tons, or procurement of 500,000 tons. So, how should we think about that available 900,000 tonnes? Is that given JERA can then be taking potentially a 48% stake did they get sort of percentage of that amount as well? Are you looking at as potentially merchant sales or are you looking to lock that up? I know you had said earlier that you basically have four years from decision to production. So, maybe how you think about how much you want to get locked up before you get into that sort of development of that project? Thank you.
Chris Bohn: Yes. So, I think just starting the encouraging thing is that about 0.5 million tons as a home already for it. And as you mentioned, with the next 4 years, and that provides a lot of opportunity to find basically sales for the remaining amount, along with keeping a little bit for merchant. But the one thing with JERA is that $500,000 is just for one particular unit at their coal plant facility. And they have multiple units they’re looking at in addition to that, as you look at what’s going on with the JERA test right now, which is a commercial test going on, which is performing to expectations. You could see other areas that JERA has within Asia, also converting to a 20% ammonia injection into the coal along with some other additional players that are looking at it that Tony mentioned within Japan as well.
