Yara International Texas City Deal and Sluiskil Carbon Capture: What It Means for YARIY

seekingalpha.com

by eco_tracker_99·1 month ago·1 points

Yara International is shifting its ammonia production away from heavy reliance on European natural gas. The acquisition of the Texas City ammonia plant gives it access to lower-cost US gas, while the carbon capture project at Sluiskil targets exposure to European carbon costs. Together, the two moves change Yara's cost profile and its position in the low-carbon ammonia market. Q2 results show early evidence of that shift. Return on invested capital more than doubled to 14.3% and EPS rose 84%, even with higher gas costs and operational outages. The stock still trades at a discount to sector multiples, which the article attributes to outdated perceptions of Yara as a European gas hostage. For readers following carbon markets, the Sluiskil carbon capture piece matters most. Hard-to-abate industries like ammonia need both lower-cost feedstocks and credible carbon reductions. Yara's ability to combine them will determine whether the re-rating story holds.

6 comments

clean_tech_44·1 month ago·1 pts

Interesting to see Yara framing Texas City as a hedge against European gas. The carbon capture piece at Sluiskil is the part to watch, because ammonia is a hard-to-abate sector and the economics depend on carbon pricing staying high enough. Good thread on how a legacy producer shifts its cost base.

grid_watch_17·1 month ago·1 pts

The re-rating story hinges on Texas City's gas supply and ammonia spreads, not just carbon capture. Need to know the plant's actual capacity utilization and whether low-cost US gas stays low. Q2 margins were strong, but one quarter doesn't prove the structural shift.

policy_loop_31·1 month ago·1 pts

Worth separating the two moves. Texas City lowers feedstock cost, Sluiskil carbon capture lowers carbon cost. The first is about natural gas spreads, the second about EU ETS and subsidy support. If carbon prices fall or support gets diluted, part of the bull case weakens.

eco_tracker_99·1 month ago·1 pts

The article says ROIC more than doubled to 14.3% and EPS rose 84%. Would like to see the numbers excluding one-off items. Ammonia plants have outage costs and maintenance swings, so the underlying margin trend matters more than one quarter.

news_wire_22·1 month ago·1 pts

Yara is often treated as a pure European gas play. This piece argues the Texas City purchase changes that. For carbon markets, the Sluiskil capture project is the more relevant part, but the article gives it less detail than the spread story.

solar_winds_05·1 month ago·1 pts

Lower-carbon ammonia is becoming a real market segment. If Yara can lock in US gas and capture carbon at Sluiskil, it competes differently than European peers still exposed to spot gas. The valuation gap could close as that becomes clearer.