Operator: Your next come question is from the line of Michael Tupholme TD Cowen.
Michael Tupholme: You spoke earlier in the call about numerous operational initiatives within your fertilizer segment is benefiting the quarter’s results. Can you provide an update as to where you’re at with some of those improvement initiatives? And what you’re still working on and how we should think about the impact on costs in potash and nitrogen specifically as we move through the balance of the year?
Kenneth Seitz: No, definitely, Mike. Thank you. So yes, I’ll hand it over to Trevor to just provide an update on, one, the reliability work that we’ve done, but then also the status of brownfield investments that we’re making to add capacity. And then maybe Chris Reynolds to talk about mine automation. But the other work that we’re doing at our operations to reduce costs, as an example, we increased our cut by automation by 40% last year. So we are certainly on a journey here to move to sort of full autonomous or [indiscernible] mining, which again contributes to cost and productivity in addition to safety. But Trevor, over to you.
Trevor Williams: And thanks for the question. Just a couple of things, and I’m going to take you back to our Q3 earnings call last year when we really talked about some of the challenges we had and some of the more specific actions were taken to really drive both reliability improvements as well as reliability or type activities across our fleet. Primarily focused on Trinidad and Borger, as we talked about last year, and really happy to be able to talk to the fact that as a result of those actions that we took last year, and Ken mentioned that earlier on in terms of when it is responses, is we did see a step change improvement in terms of both capacity utilization with respect to our Trinidad asset. And that really is related to the availability and how we utilize gas at that facility as well as, again, Ken mentioned, we did invest some money.
We took the time and invested a significant amount of energy into our Borger facility, and we’re really starting to see those pay off in terms of in 2024. We also talked about a little bit in terms of, as Ken mentioned, while we did see some minor weather impacts this year in terms of earlier Q1. Again, the focus we put on winterization really setting our assets up for success here late last year, again, really paid some dividends in terms of where we are. So a simple example, if you look at just in terms of our strategy in Trinidad, we are operating at about a 10% increase in terms of overall gas utilization, capacity utilization, which is a big step change. So in terms of the debottleneck side in terms — with respect to some of our side, so we did complete several smaller debottlenecks in Q4, late Q3, early Q4 of last year, primarily at Geismar and a little bit of Borger.
And those in combination with the reliability items that I talked about and Ken mentioned, we’re going to add about a little over 1 million tonnes over the course of the next several years in terms of capacity and reliability additions. So with that, I’ll pass it over to Chris for some comments on the potash side.
Christopher Reynolds: Yes, Mike, thanks for the question. And as Ken mentioned, we’ve been really pleased with our progress in terms of the automation of our mines. [indiscernible] increase in the that we cut in 2023 compared to 2022. And we’ve seen the progress continue here in the first quarter as well. And that’s one of the benefits when you have 6 low-cost, low-emission mines across our network, and we spread that automation across the 5 conventional underground mines. The learnings that you can get across the network, which accelerates that performance and that experience. And so that’s one of our main areas of concentration for improving our cost. But then there are numerous continuous improvement projects we have, again, spread across that network of 6 mines. And so the biggest one is the automation, but then there’s a number of other smaller continuous improvement projects we’re focused on as well.
Operator: Your next question is from the line of Vincent Andrews from Morgan Stanley.
Vincent Andrews: I would love to hear your thoughts sort of on the reconciliation of the nitrogen market year-to-date in particular, in North America, just sort of how you think through the movement in prices recently with the sort of factual data on the reduction in imports year-to-date versus normal. So I would just like to hear your thoughts on how and why that played out and also what you think the shape of the rest of the year will look like.
Kenneth Seitz: No, that’s good, Vincent. Thanks for the question. There are a number of moving parts there to be sure. I’ll hand it over to Jason Newton to talk about sort of the macro and the fundamentals in the near term and then over to Mark to talk about the market.
Jason Newton: As I mentioned, the [indiscernible] differ product by product in nitrogen, we’ve seen various movements through the year to date. If we look at ammonia to start, and that’s where you mentioned, if we look at the U.S. trade balance, the ammonia market has been tight. We saw early strong spring ammonia applications in the U.S. And those 2 factors led to, in combination with production outages in the U.S. led to tight supply and demand from ammonia and in support for U.S. ammonia prices. In addition, if we look globally, the trade east and west of U.S. has been impacted by challenges in shipping to the Red Sea. And so shipments from the Middle East to [indiscernible] markets has been because of that. And so to some extent, we’ve seen stronger ammonia pricing than we would have expected through the year, it’s relatively flat overall.
The urea market, I’d say we’d see relatively normal price seasonality. We started the year relatively strong. And you can see, if you look on Slide 26 in our deck, of the 3 major nitrogen products, the urea trade balance has been most balanced in the U.S. and that, in our minds, is evidence that buyers are proactive in positioning themselves . And we have seen in the last couple of application and planting progress has slowed with the weather that we’ve seen. And so that in combination with weaker-than-expected Indian results, the anticipation of Chinese supply, which is kind of been off and on and some uncertainty there in terms of when that supply will actually be available, that’s put some pressure on urea prices, which at this time of year, Northern Hemisphere demand is wrapping up and the time to get it into market is drawing to a close.
It’s pretty normal. And just to finish on urea, we do see that prices have moved seasonally lower. But in market prices within North America have maintained a large premium to the important benchmarks, which is typical for this time of the year.
