By Evie Liu
Fertilizer stocks had a mixed reaction after the U.S. and Iran reached a preliminary deal that could ease the supply shock that lifted fertilizer prices earlier this year. The deal is good news for fertilizer buyers, but bad news for producers.
By Monday afternoon, CF Industries was down about 2.3% and Nutrien lost 2.5%. Mosaic shares rose 3% in the morning, but retreated to a 0.7% loss in late afternoon.
Still, that is not the kind of selloff some investors might have expected from a deal that could lift the U.S. blockade on Iranian ports and reopen the Strait of Hormuz -- a route that handles roughly one-third of the fertilizer trade.
To start with, the three companies are exposed to different parts of the fertilizer market. CF Industries is the most direct loser because it mainly produces nitrogen fertilizers like urea and ammonia, whose prices would be falling as the Middle East's supply flow restores following the reopening of Hormuz.
Nutrien is more diversified. It is a major potash producer and also has a large retail distribution business. That means it's exposed to nitrogen fertilizers, but not as much as CF. While a reopening of Hormuz could pressure nitrogen prices, it would also improve supply availability and help Nutrien's retail business by lowering procurement costs.
Mosaic is more exposed to phosphate and potash, not nitrogen. That makes it less directly tied to the urea trade. For Mosaic, the Iran disruption was more of a cost problem. Sulfur, a major input for its phosphate business, is experiencing a shortage due to the conflict and squeezing Mosaic's margins. A reopening could actually help Mosaic by easing the input-cost pressure.
The market had already started to price in some relief before the deal announcement. Prices of urea had started falling weeks ago as traders anticipated reopening of some shipping routes in the Persian Gulf.
Stocks in fertilizer producers are reacting as well. CF Industries shares have declined 13% over the past three months, Nutrien stock is down 15%, and Mosaic has lost 16%. But Mosaic shares have jumped 18% since last Wednesday.
The lingering uncertainty might be another reason why investors are not moving so fast just yet. The deal extended a cease-fire that had been in place since April and allowed another 60 days for broader talks. But it remains unclear whether some of the most difficult issues -- including shipping security, Iran's nuclear program, and the nation's regional conflict with Israel -- will be settled.
What's more, the deal doesn't instantly restore normal fertilizer flows. Oil tankers and LNG carriers are likely to get priority through the Strait of Hormuz, while dry-bulk fertilizer cargoes may face delays. Damaged infrastructure, insurance costs, port congestion, and uncertainty over sanctions could also keep supply chains tight even after the formal reopening.
Write to Evie Liu at evie.liu@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
June 15, 2026 15:44 ET (19:44 GMT)
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