Tony Will: I would say the biggest reason, then I’ll turn it over to Bert for some more specifics here. But I’d say the biggest thing that affects it is really one of the shift of policy around trying to reduce environmental pollution in the country. There’s — recently here since COVID, there’s also been a strong desire in order to help curve inflation around availability and affordability of nitrogen fertilizers and so some pretty significant restrictions on exports. But in terms of in a looser export restriction environment, the thing that gives us a lot of comfort around them not going back to the old days is the real push around environmental cleanup and just environmental quality. Urea is a huge particulate matter amid or a big consumer of freshwater, there’s not that many employment jobs that go along with it and you’re effectively exporting energy in the form of urea when you’re turning around an importing natural gas, and it’s just not a good trade from a policy perspective but from the central government.
Bert Frost: I think you covered it well. And the key thing for me was a very good governmental action to protect. This is reflective on 2022. The export controls, an inflation control mechanism and a cost control mechanism for the Chinese farmer to have available nutrients and it worked, and they did. And so when the price of the global market hit $800, the price in China was $400. And so I think that was a successful program. And we see Chinese exports moderating, you’re right last year, they’re just below three million tons and probably expect that same level to up to maybe five million tons. But today, the Chinese price is higher than the global market. So there is not an incentive to export those tons. And they’re going into their spring season, just like we are in the Northern Hemisphere, and I expect demand to be robust.
China has been a very active purchaser supporting the global agricultural structure of corn and soybeans and refined products for the — for now decades. And we expect that to continue as they rebuild their stocks, as well as their protein stocks, as well as their feed grain stocks. So we don’t see a big change coming out of China on the export front for urea in 2023.
Will Tang: Got it. Thank you.
Operator: We have a question from Andrew Wong from RBC Capital Markets. Andrew, please go ahead.
Andrew Wong: Hi. Thanks for taking my question. So thinking a little bit longer term here on the market. We haven’t seen a lot of announcements for kind of traditional gray ammonia builds, or urea or UAN or anything like that? Like, why do you think that is? And with some of these new low-carbon projects that have been coming up, most of it is just ammonia. Do you see some of this ammonia entering the traditional market and competing with great tons, or do you think they’re going to be mostly reserved for clean ammonia users?
Tony Will: I mean, I think that’s one of those situations, where you never fully 100% in balanced where demand develops at exactly the same rate as new production does. I think what we’ll probably see is as demand develops, if there’s not enough production, initial implementation using conventional or gray ammonia with a desire to shift towards blue as it becomes available. And as you have a project or two like this that comes up, if for a while, you get a little bit of excess availability of that product, it’s chemically identical, so it can certainly go into any of the uses. My sense is on the margin, there will be desire on a broader industrial application basis to start making use of low-carbon ammonia as it becomes available.
