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CF Industries (CF) and POSCO to Build Low-Carbon Ammonia Plant

CF Industries Holdings, Inc. CF, the world's largest ammonia producer, and POSCO Holdings Inc., South Korea's largest steelmaker with a strong presence in energy trading and power generation, have announced their collaboration on evaluating a joint venture. This venture aims to build a low-carbon clean ammonia plant within CF Industries' Blue Point Complex in Ascension Parish, LA, in the United States and establish a long-term supply of low-carbon clean ammonia to South Korea.

As a crucial part of this project evaluation, CF Industries and POSCO will initiate a front-end engineering and design (FEED) study focused on autothermal reforming (ATR) ammonia production technology. The ATR technology, in conjunction with carbon capture and sequestration (CCS), is expected to significantly reduce carbon dioxide (CO2) emissions from the ammonia production process, achieving a reduction of over 90% compared to conventional ammonia plants without CCS. This reduction will enable the resulting low-carbon clean ammonia to meet the South Korean government's Clean Hydrogen Energy Portfolio Standard requirements.

If the project proceeds as planned, POSCO intends to import this low-carbon clean ammonia from the facility in the United States to support the decarbonization efforts of its coal-based power generation facilities in South Korea. Furthermore, POSCO has plans to convert this low-carbon clean ammonia into hydrogen for use in gas-based power plants and steel-making processes, thus contributing to its broader sustainability goals.

CF Industries is excited to partner with POSCO in their shared commitment to decarbonization, both for POSCO's initiatives and South Korea's broader sustainability objectives. POSCO's clear strategy to leverage low-carbon ammonia for expediting the decarbonization of its steel manufacturing and power generation sectors presents a substantial boost in demand for clean energy in the form of low-carbon ammonia.

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Furthermore, the United States holds a strategic position within the POSCO Group's global agenda, particularly in its pursuit of establishing a robust and economically viable overseas network for the supply of hydrogen and ammonia. This endeavor aligns with the IRA support policy and aims to transform the United States into a pivotal production hub for clean ammonia. Collaborating with CF Industries will play a pivotal role in realizing this vision. The goal is to create a dependable supply network that can efficiently deliver clean hydrogen, essential for domestic power generation and the hydrogen reduction process in steelmaking.

CF Industries Holdings, Inc. Price and Consensus

 

CF Industries Holdings, Inc. Price and Consensus
CF Industries Holdings, Inc. Price and Consensus

CF Industries Holdings, Inc. price-consensus-chart | CF Industries Holdings, Inc. Quote

 

The FEED study is anticipated to conclude in the second half of 2024, with CF Industries and POSCO making a final investment decision after that.

Since 2020, CF Industries has been at the forefront of efforts to decarbonize its ammonia production network. The company is strategically positioned to provide substantial low-carbon clean ammonia in the coming years. Its initiatives include collaborating with ExxonMobil to construct a CO2 dehydration and compression facility at its Donaldsonville Complex, enabling the capture and permanent sequestration of up to 2 million tons of CO2 per year starting in 2025. Additionally, CF Industries is working with Mitsui & Co., Ltd. on a front-end engineering and design study to establish a greenfield low-carbon clean ammonia facility, employing steam methane reforming (SMR) ammonia technology combined with CCS at their Blue Point Complex in Louisiana. CF is also constructing North America's first commercial-scale green ammonia capacity at its Donaldsonville Complex, set to begin production of up to 20,000 tons of green ammonia in 2024. These efforts underscore its commitment to sustainable ammonia production and supply.

CF has fallen 20.7% in the past year, compared with the industry's 32.1% fall in the same period.

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Zacks Rank & Key Picks

CF currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Carpenter Technology Corporation CRS and Akzo Nobel N.V. AKZOY, both sporting a Zacks Rank #1 (Strong Buy), and Alamos Gold Inc. AGI, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 77.4% in the past year.

The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating a year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 3.6%. The company’s shares have rallied 22.6% in the past year.

The earnings estimate for Alamos’ current year is pegged at 43 cents, indicating a year-over-year growth of 53.6%. The Zacks Consensus Estimate for AGI current-year earnings has been revised 7.5% upward in the past 60 days. The company’s shares have risen roughly 68.8% in the past year.

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CF Industries Holdings, Inc. (CF) : Free Stock Analysis Report

Carpenter Technology Corporation (CRS) : Free Stock Analysis Report

Akzo Nobel NV (AKZOY) : Free Stock Analysis Report

Alamos Gold Inc. (AGI) : Free Stock Analysis Report

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