Nutrien weighs phosphate future as sulfur costs push Q2 margins negative

Nutrien is reviewing the future of its phosphate business after sharply higher sulfur costs pushed the segment into a negative gross margin in the second quarter of 2026. Phosphate cost of goods sold increased to $812 per tonne from $646 per tonne a year earlier, while gross margin fell to negative $31 per tonne from positive $68. Nutrien said higher sulfur input costs were the primary driver of the increase, despite stronger global phosphate prices.

The company said it remains on track to determine the “optimal path” for its phosphate business, Trinidad nitrogen facility and Brazilian retail operations during 2026 as part of a broader portfolio optimization program. Nutrien has divested about $1 billion of non-core assets since the fourth quarter of 2024, including agreements reached since June for approximately $90 million of additional asset sales. The company has not specified whether the phosphate review could result in a sale, partnership, restructuring or another option.

Phosphate sales volumes nevertheless increased to 590,000 tonnes in the quarter from 543,000 tonnes a year earlier, supported by reliability improvements completed in 2025. Nutrien maintained its full-year phosphate sales guidance at 2.4 million to 2.6 million tonnes, although its P2O5 operating rate declined to 75% from 79%. The weakness contrasted with the company’s potash business, which generated a gross margin of $154 per tonne in Q2 and record first-half production, while first-half nitrogen adjusted EBITDA rose to $1.12 billion. Nutrien said constrained sulfur availability and elevated costs continue to put “unsustainable pressure” on global phosphate producer margins. Any divestiture would reshape the North American phosphate supply picture, where Mosaic is also curtailing output under similar sulfur cost pressure.

Source: AgNavigator