Contradictions Unveiled: LSB Industries' Q1 2025 Earnings Call Highlights Feasibility, Pricing, and Tariff Challenges

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Sales Volume Increase:
- LSB Industries achieved a 4% improvement in sales volumes quarter-over-quarter, driven by solid improvement in sales volumes for ammonium nitrate and UAN.
- This increase is due to higher ammonia production and better performance by upgrading plants, demonstrating enhanced reliability and efficiency.

Pricing Trends and Market Dynamics:
- UAN prices rose significantly, with Nola UAN prices currently at $350 per ton, up 73% from the low in 2024.
- The rise in prices is attributed to strong demand, insufficient import volumes, and tariff pressures, resulting in tight U.S. inventories.

Impact of U.S. Tariffs:
- U.S. tariffs have led to a significant uplift in domestic pricing for prompt delivery of urea, with expectations for this trend to persist through the spring planting season.
- The company anticipates limited exposure to retaliatory tariffs from other countries, as exports are primarily to Mexico and Canada.

Investment in Reliability and Efficiency:
- LSB Industries is increasing its ammonia production outlook by approximately 30,000 tons for 2025, delaying a turnaround originally scheduled for the second half of the year.
- This is due to delays in equipment delivery, allowing for continued ammonia production at elevated levels.

Decarbonization Initiatives:
- The company received precertification status for low-carbon ammonia production at its El Dorado plant under the Verified Ammonia Carbon Intensity Program.
- The certification is expected to facilitate securing sales agreements for low-carbon ammonia and upgraded product output, enhancing market competitiveness.