S&P lifts LSB Industries

S&P said it raised the ratings on LSB Industries Inc. and its senior secured notes to B from B-.

“Tightness in nitrogen fertilizer markets has propelled prices for agricultural ammonia, UAN, and HDAN substantially higher in recent quarters, with Tampa ammonia and UAN selling for over $1,000 per metric ton and $500 per short ton, respectively, as of February 2022. Market tightness began to surface in early 2021, when weather-related disruptions in North America caused unplanned outages across the industry, while a number of planned plant turnarounds, postponed from 2020, further tightened supply,” the agency said in a press release.

Another plus for LSB is natural gas prices in Europe that are so high, local producers have curtailed or shutdown production, S&P said.

“Although we view current pricing as unsustainable in the long run and continue to account for commodity price volatility in our forecast, we anticipate ongoing supply constraints and strong end-market demand across the company's agricultural, industrial, and mining end markets will support higher pricing in 2022, resulting in improved credit measures and strong free cash flow generation over the next 12 months,” S&P said.

The outlook is stable.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.