Market Update July 2018 - Nutrien
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Market Update July 2018
Forward Looking Statements 2
Certain statements and other information included in this presentation constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-
looking statements") under applicable securities laws (such statements are often accompanied by words such as "anticipate", “forecast”, "expect", "believe", "may", "will",
"should", "estimate", "intend" or other similar words). All statements in this presentation, other than those relating to historical information or current conditions, are
forward-looking statements, including, but not limited to: our market outlook for 2018, including potash, nitrogen and phosphate outlook and including anticipated pricing of
and supply and demand for our products and services, expected market and industry conditions with respect to crop nutrient application rates, planted acres, crop mix,
prices and the impact of currency fluctuations and import and export volumes; and the expected synergies associated with the merger of Agrium and PotashCorp,
including timing thereof. These forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond our control, which
could cause actual results to differ materially from such forward-looking statements. As such, undue reliance should not be placed on these forward-looking statements.
All of the forward-looking statements are qualified by the assumptions that are stated or inherent in such forward-looking statements, including the assumptions referred to
below and elsewhere in this document. Although Nutrien believes that these assumptions are reasonable, this list is not exhaustive of the factors that may affect any of
the forward-looking statements and the reader should not place an undue reliance on these assumptions and such forward-looking statements. The additional key
assumptions that have been made include, among other things, assumptions with respect to Nutrien's ability to successfully integrate and realize the anticipated benefits
of its already completed (including the merger of Agrium and PotashCorp) and future acquisitions, and that we will be able to implement our standards, controls,
procedures and policies at any acquired businesses to realize the expected synergies; that future business, regulatory and industry conditions will be within the
parameters expected by Nutrien, including with respect to prices, margins, demand, supply, product availability, supplier agreements, availability and cost of labor and
interest, exchange and effective tax rates; the completion of our expansion projects on schedule, as planned and on budget; assumptions with respect to global economic
conditions and the accuracy of our market outlook expectations for 2018 and in the future; the adequacy of our cash generated from operations and our ability to access
our credit facilities or capital markets for additional sources of financing; our ability to identify suitable candidates for acquisitions and divestitures and negotiate acceptable
terms; our ability to maintain investment grade rating and achieve our performance targets; assumptions in respect of our ability to sell equity positions, including the
ability to find suitable buyers at expected prices and successfully complete such transactions in a timely manner; the receipt, on time, of all necessary permits, utilities and
project approvals with respect to our expansion projects and that we will have the resources necessary to meet the projects’ approach.
Events or circumstances that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: general global
economic, market and business conditions; the failure to successfully integrate and realize the expected synergies associated with the merger of Agrium and PotashCorp,
including within the expected timeframe; weather conditions, including impacts from regional flooding and/or drought conditions; crop planted acreage, yield and prices;
the supply and demand and price levels for our products; governmental and regulatory requirements and actions by governmental authorities, including changes in
government policy, government ownership requirements, changes in environmental, tax and other laws or regulations and the interpretation thereof; political risks,
including civil unrest, actions by armed groups or conflict and malicious acts including terrorism; the occurrence of a major environmental or safety incident; innovation
and security risks related to our systems; the inability to find suitable buyers for our equity positions and counterparty and transaction risk associated therewith; regional
natural gas supply restrictions; counterparty and sovereign risk; delays in completion of turnarounds at our major facilities; gas supply interruptions at our Egyptian and
Argentinian facilities; any significant impairment of the carrying value of certain assets; risks related to reputational loss; certain complications that may arise in our mining
processes; the ability to attract, engage and retain skilled employees and strikes or other forms of work stoppages; and other risk factors detailed from time to time in
Agrium, PotashCorp and Nutrien reports filed with the Canadian securities regulators and the Securities and Exchange Commission in the United States, including those
relating to Nutrien’s business disclosed in our business acquisition report dated February 20, 2018, related to the merger of Agrium and PotashCorp.
Nutrien disclaims any intention or obligation to update or revise any forward-looking statements in this document as a result of new information or future events, except as
may be required under applicable U.S. federal securities laws or applicable Canadian securities legislation.
July 17, 2018
Nutrien Has a Unique Global Footprint 3
North American Integrated Footprint South America
Australia
LEGEND:
RETAIL GRANULATION
POTASH LOVELAND PRODUCTS AND AFFILIATED FACILITIES
NITROGEN AGRICHEM
PHOSPHATE INVESTMENTS AND JV’S
ESN® OFFICES
>26Mmt 29 1,700+ ~1,600
Combined sales Production North American Retail locations
tonnes of potash, facilities in distribution touch worldwide
nitrogen, phosphate North America points
& sulfate1 and Trinidad
NOTE: European distribution and our ownership stakes in Sinofert and the MOPCO nitrogen facility are not included on these maps. July 17, 2018
1 2017 proforma sales tonnes (excluding Conda phosphate and North Bend nitric acid facilities). Refers to manufactured product.
Agriculture Fundamentals: Supportive into 2018 4
Selected Crop Prices
(As at July 10, 2018) 3-Year Average Current 2018 Futures
$9.73 $3.69 $0.16 2,559
$3.48 $3.59
$8.55 $8.72 2,268 2,282
$0.11 $0.11
Dec’18
Nov’18
Nov’18
Oct’18
Soybean (US$/bu) Corn (US$/bu) Sugar (US$/lbs) Palm Oil (MYR/mt)
Regional Highlights
North Latin
India Other Asia China
America America
• Increased crop support • Palm oil prices remain • Total US crop planted • Acreage expansion • Farm consolidation
prices and normal at supportive levels acreage is up yr/yr in expected to continue supporting fertilization
monsoon forecast should • Plantations 2018 despite changes in although at slower pace practices; continued shift
support fertilizer demand implemented yield crop mixes • Unfavorable weather to high-value, nutrient-
• Government recovery programs • Strong fertilizer conditions affected crop intensive crops
implemented higher following drought in 2016 affordability supports production in Argentina • Government reduced
import duty on several • Population and income application rates • The recent dispute on subsidized corn prices,
crops including oilseeds, growth support demand road freight in Brazil has but proposed new ethanol
wheat and pulses for a wide-range of crops slowed the pace of grain (E10) target by 2020
and fertilizer movement
Source: S&P Global Market Intelligence July 17, 2018
Robust Global Grain and Oilseed Demand Growth 5
Global Grain & Oilseed Demand Growth
Percentage
5.0%
Annual Growth 5-Yr. CAGR
4.0%
3.0%
2.0%
1.0%
0.0%
-1.0%
-2.0%
Five-year grain & oilseed demand growth CAGR of 2.7%, which is the highest since the
early 1980s
Source: USDA, FAO, Nutrien July 17, 2018
* 2017F represents the 2017/18 crop year
US Major Crop Acreage 6
US Major Crop Acreage
Million Acres
2013 2014 2015 2016 2017 2018F
Corn 95.3 90.6 88.4 94.0 90.2 89.1
Soybeans 76.5 83.7 83.2 83.4 90.1 89.6
Wheat 56.2 56.8 54.6 50.2 46.0 47.8
Cotton 10.3 11.0 8.6 10.1 12.6 13.5
Sorghum 8.1 7.2 8.7 6.7 5.6 6.0
Rice 2.5 2.9 2.6 3.2 2.5 2.8
Total US Major 249 252 246 248 247 249
Latest USDA report suggested higher US crop planted acreage in 2018, which should
support a relatively strong crop input demand outlook
Source: USDA, FAO, Nutrien July 17, 2018
* 2018F represents the 2018/19 crop yearCanadian Major Crop Acreage 7
Western Canada Major Crop Acreage
Million Acres
2013 2014 2015 2016 2017 2018F
Canola 20.1 20.6 20.5 20.2 22.8 22.6
Wheat 24.8 23.0 23.1 21.8 21.2 23.4
Barley 6.6 5.5 6.2 6.0 5.4 6.2
Peas 3.3 4.0 3.7 4.2 4.0 3.6
Lentils 2.7 3.1 4.0 5.9 4.4 3.8
Soybeans 1.2 1.5 1.7 1.9 3.1 2.5
Eastern Canada Major Crop Acreage
Million Acres
2013 2014 2015 2016 2017 2018F
Corn 3.3 2.8 3.0 3.2 3.1 3.1
Soybeans 3.4 4.0 3.9 3.7 4.1 3.8
Barley 1.3 1.2 1.1 1.5 1.3 1.4
Increased cereal acreage in place of pulses supported 2018 nutrient demand in W. Canada
Source: USDA, FAO, Nutrien July 17, 2018
* 2018F represents the 2018/19 crop yearUS Grower Margins Have Weakened 8
US Cash Grower Margins1
US$/Acre
Corn Soybeans Wheat Cotton
450
400
350
300
250
200
150
100
50
0
Prospective 2018 grower margins have declined since late-May, driven by trade war fears
and favorable crop conditions
Source: USDA, Green Markets, CME Group, Nutrien
1 2017/18 margins are based on marketing year average crop prices and estimated average fertilizer costs; 2018/19 margins are based on new crop 2018 futures prices July 17, 2018
less estimated basis and estimated spot retail fertilizer pricesMixed Grower Margins in W. Canada 9
W. Canadian Cash Grower Margins1
US$/Acre
Canola HRS Wheat Peas Lentils
300
250
200
150
100
50
0
-50
Improvement in growing conditions have pressured some prices; pulse crop margins
remain low
Source: USDA, Green Markets, CME Group, Nutrien
1 2017/18 margins are based on marketing year average crop prices and estimated average fertilizer costs; 2018/19 margins are based on new crop 2018 futures prices July 17, 2018
less estimated basis and estimated spot retail fertilizer pricesGrowing Chinese Soybean and Corn Demand 10
Chinese Soybean Imports Chinese Corn Production less Consumption*
Million Tonnes Million Tonnes
20
Other U.S.
0
57 61 (20)
53
49
43 (40)
36 38
28 28
22 (60) Potential added
24
demand from
36 36 Chinese ethanol
28 30 30 (80)
22 24 24 22 mandate
19
13
(100)
Chinese soybean imports have grown at 8.5% CAGR; the gap between corn
production and domestic consumption is expected to increase
Source: USDA, Nutrien July 17, 2018
* Forecasts based on flat corn acreage in China with trend yields while consumption excluding ethanol is expected to continue to grow at historical rates.Global Potash Prices 11
Selected Potash Prices
350 Brazil CFR ($/mt) US Midwest FOB ($/mt) US NOLA FOB ($/mt)
300
250
200
150
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2016 2017 2018
International US Midwest US NOLA
Near-term Stocks are flat-to-down in Normal potash demand Offshore imports remain at
most major international supported by affordable elevated levels but import
Themes markets. Consumption
has remained strong in
prices and the need to
replace nutrients removed
pace has slowed in 2018
from a year ago.
key markets. by last year’s harvest.
Source: Fertilizer Week, Nutrien July 17, 2018Potash Consumption Trend Expected to Continue 12
Potash Fertilizer Consumption Growth Potash Shipment Growth
2013-2018F CAGR* 2013-2018F Million Tonnes KCl
9% 8.6% 65.5
0.4
8% 1.1
7% 2.2
6% 5.6%
5.1% 2.4
5%
4.0%
4% 3.6% 1.6
3%
2% 4.5
1% 0.7% 53.3
0%
China India Other Latin North World 2013 China India Other Latin North Rest of 2018F**
Asia America America Asia America America World
Affordable prices and agronomic need expected to drive strong potash consumption
growth, particularly in offshore markets
Source: CRU, Fertecon, Industry Publications, Nutrien July 17, 2018
* Based on CRU potash fertilizer consumption forecast as at August 2017 ** Based on global shipment forecast for 2018 as at May, 2018Record Global Potash Demand Projected in 2018 13
Global Potash Shipments by Region
Million Tonnes KCl
20
Previous Record:
15.8mmt (2015)
Previous Record:
15 Previous Record: 13.7mmt (1997)
Previous Record: 12.2mmt (2017)
Previous Record: 11.1mmt (1997)
10.0mmt (2017)
10
Previous Record:
6.3mmt (2010)
5
0
15 16 17E 18F 15 16 17E 18F 15 16 17E 18F 15 16 17E 18F 15 16 17E 18F 15 16 17E 18F
India Other Asia North America Latin America China Other
4.5 – 5.0Mmt 10.0 – 10.5Mmt 9.5 – 10.0Mmt 12.0 – 12.5Mmt 15.5 – 16.0Mmt 12.5 – 13.0Mmt
Highlights
• Expect modest • Demand supported • Steady demand • Improved crop • Strong consumption • Good affordability
2018
demand growth in by record palm oil supported by strong economics and trends supported by and growing demand
line with positive production and affordability and acreage growth in affordability and a for NPK fertilizers,
consumption trends robust crop significant removal nutrient deficient shift to more including in Africa,
despite reduced economics for a wide of nutrients following regions has potassium-intensive are expected to
subsidy rates for range of key crops consecutive large supported strong crops like fruits and boost potash
2018/19 FY harvests potash demand vegetables demand
Source: CRU, Fertecon, IFA, Nutrien July 17, 2018North America Potash Market Profile 14
Potash Demand Potash Usage Profile (2014/15)
Million Tonnes KCl Percentage
Other
10.2Mmt 10.4Mmt 25%
9.6Mmt 43% Corn
Cotton 3%
5%
Wheat
24%
Soybean
KCl Supply Profile (2017)
Percentage
Other
North
Nutrien 44% 39% American
2000 2010 2017E
17%
N:K Ratio 2.5 : 1 2.9 : 1 2.5 : 1 Imports
Expect moderate demand growth going forward as high percentage of soils
continue to test below critical potassium levels
Source: CRU, Fertecon, IFA, Nutrien July 17, 2018History of World Potash Mine Closures 15
Potash Capacity Closures
(Million Tonnes)
16
Water Inflow Ore Depletion/Other
14
12
10
8
6
4
2
0
1980s 1990s 2000s 2010-2020F
Average of more than 7 million tonnes of capacity closed each decade
Source: CRU, Fertecon, IFA, Nutrien July 17, 2018Relatively Tight Potash Supply & Demand 16
Global Potash S&D Global Utilization Rate1
Million Tonnes KCl Percent
Demand Growth @ 3.0%/yr Demand Growth @ 3.0%/yr*
80 Demand Growth @ 2.8%/yr Demand Growth @ 2.8%/yr*
100%
Operational Capability
70
95%
60
90%
50
40 85%
30
80%
20
75%
10
0 70%
Expect demand growth and capacity closures to offset capacity additions;
operating rates expected to be at or above historical average
Source: CRU, Fertecon, IFA, Nutrien
1 Based on estimated operational capability July 17, 2018
* Demand growth based on 20 year CAGR 2002 to 2022Global Urea Prices 17
Selected Urea Prices
350 China FOB ($/mt) US NOLA FOB ($/mt) US Midwest FOB ($/mt)
300
250
200
150
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2016 2017 2018
China India US NOLA
Near-term Domestic availability is Indian inventories began Reduced supply
tight after significant 2018 at historically low availability as a result of
Themes shutdowns and higher
feedstock prices.
levels, supporting robust
imports in 1H 2018.
slow import pace more
than offsetting increased
domestic production.
Source: Fertilizer Week, Nutrien July 17, 2018Ammonia: Key Regional Trade Balances 18
Key Ammonia Exporting Regions Key Ammonia Importing Regions
Million Tonnes Million Tonnes
6 6
Prev. 3 year Avg 2017E -26%
+2%
+1% 5.0
5 5
4.5 4.5
-12% 4.2 4.3
Increase due to Ma’aden
4 ammonia, much of which
4 3.7
3.6
will feed future Ammonia imports in China
DAP/MAP production 3.2 nearly doubled in the last
+8% 3 years and are expected
3 3 to further increase in 2018
+49%
2.3
+10% 2.1 +56%
1.9 +6% +31%
2 -7% 2
+30%
+375% 1.5 1.4 +142%
1.3 1.3 -27% 1.3
1.2 1.3 1.1 1.0
-72% 0.9 1.0
0.9
1 0.7 0.7 0.8 1 0.7
0.5 0.6
0.3
0.2 0.1
0 0
US
Canada
China
US
Iran
SE. Asia
W. Europe
S. Arabia
S. Korea
Morocco
Trinidad
India
Algeria
Russia
Ukraine
Qatar
New US capacity has reduced net import demand and global trade flows; however marginal
capacity closures and growth in non-US imports have offset US reductions
Source: Fertecon, CRU, Nutrien July 17, 2018Tight Chinese Urea Supplies Reduce Exports 19
Chinese Urea Exports
Million Tonnes
-36% $192
$175
13.8
Chinese $151 $149
13.6 $127
Energy $106
Costs
(US$/MT)
-47%
2013 2014 2015 2016 2017 2018
8.9 China Anthracite Coal
8.3 Current
(55% of Urea Production)
-36% 0.73 0.70
4.7 Chinese
Port Urea
2.0-3.0 Inventories
(mid-June)
0.17
2013 2014 2015 2016 2017 2018F 2016 2017 2018
Chinese urea operating rates have increased, but port inventories remain low
Source: CRU, Fertecon, Profercy, Nutrien July 17, 2018Increased US Domestic Nitrogen Production 20
US Ammonia Production US Urea Production US UAN Production
Million Tonnes Million Tonnes Million Tonnes
+45% +171% +31%
15.5-16.5 5.5-6.5 12.5-13.5
14.6 12.1
11.2
12.5 4.9 10.3 10.0
11.4 11.7
3.4
2.6
2.4
2014 2015 2016 2017 2018F 2014 2015 2016 2017 2018F 2014 2015 2016 2017 2018F
The US has added significant nitrogen capacity in recent years, reducing its net import
requirement and leading to increased export volumes when netbacks are favorable
Source: TFI, CRU, Fertecon, Nutrien July 17, 2018Relatively Tight North American Urea Supplies 21
North American Urea Supply1 North American UAN Supply1
Million Tonnes Urea (Jul-Jun) Million Tonnes Urea (Jul-Jun)
13.4 13.2 14.1 14.2 14.1
12.4
2015/16 2016/17 2017/18E 2015/16 2016/17 2017/18E
Tight North American urea supplies entering the summer fill season;
While UAN supplies are relatively flat to the past 2 years
Source: TFI, US Department of Commerce, Piers, Nutrien July 17, 2018
1. Supply is equal to cumulative fertilizer year to date North American production plus offshore imports less offshore exportsTightening Global Nitrogen Supply & Demand 22
Global Nitrogen S&D Global Utilization Rate1
Million Tonnes Nitrogen Percent
180 Demand Operational Capability
100% Demand Growth @ 2.0%/yr*
160
140 95%
120
90%
100
85%
80
60 80%
40
75%
20
0 70%
Forecast improvement in nitrogen capacity utilization expected over the medium-term
Source: CRU, Nutrien
1 Based on estimated operational capability. Adjusted for idled capacity in China and Eastern Europe. July 17, 2018
* Demand growth based on 20 year CAGR 2002 to 2022Global Phosphate Prices 23
Selected Phosphate Prices
450 Tampa DAP FOB ($/mt) China DAP FOB ($/mt) Brazil MAP CFR ($/mt)
400
350
300
250
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2016 2017 2018
China US Midwest Brazil
Near-term Significant environmental US slow to recover Strong Latin American
Themes and production economics
pressure.
relative to other markets.
Capacity curtailments
demand expected to
continue into 2018.
helping to support prices.
Source: Fertilizer Week, Nutrien July 17, 2018Phosphate Raw Material Costs 24
Selected Raw Material Prices
US$/Tonne
400 Tampa Liquid Sulfur FOB
Tampa Ammonia
350
300
250
200
150
100
50
0
Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar May Jul
2016 2017 2018
Production costs continue to be impacted by higher year-over-year sulfur prices
Source: Fertilizer Week, Nutrien July 17, 2018Expect Lower China DAP/MAP Exports 25
China P2O5 Capacity Operating Rate Chinese DAP/MAP Exports
Million Tonnes Percent Million Tonnes
23 Operating Rate Capacity 85 12
10.8
22
10
80 8.8 8.9
21 7.5-8.5
8
20 7.2
75
19 6
70 4.5 4.5
18
4
17
65
2
16
15 60 0
2012 2013 2014 2015 2016 2017 2018F 2012 2013 2014 2015 2016 2017 2018F
Environmental pressures are expected to continue to impact Chinese production
and future export capabilities
Source: CRU, Nutrien July 17, 2018Select Region Phosphate Trade 26
US DAP/MAP Trade India DAP Phosphate Imports
Million Tonnes Million Tonnes
3 Imports Exports 2.4 8 7.6 Imports Inventory*
2 1.8
1.2 1.4 7
0.9 0.8 6.4
1 0.5 0.6 6.2
0.1 6 5.8
0
5.0
-1 5
4.3
-2 4.0
4 3.5 3.6
-3
-3.2 3
-4 -3.8
-5 -4.4 -4.2 2
-4.7
-5.2
-6 1
-6.0
-7 -6.4 -6.6
0
2010 2012 2014 2016 2018F 2010 2012 2014 2016 2018F
US and Chinese production reductions and tight inventories in India supportive of
stronger DAP imports in 2018
Source: Fertecon, CRU, Nutrien July 17, 2018
* 2017 inventory estimate is from December 2017Limited Global Phosphate Projects Beyond 2018 27
Global Phosphoric Acid Supply Additions (pro-rated for start-up)
Million Tonnes
2.5 China Morocco Middle East Latin America Others Closures Net Additions
2.0
1.5
1.0
0.5
0.0
2013 2014 2015 2016 2017 2018F 2019F 2020F 2021F 2022F
-0.5
-1.0
-1.5
-2.0
Capacity additions slow post 2018, which combined with closures and demand
growth should lead to a rapid tightening of the S&D balance
Note: Does not include all smaller debottleneck projects and capacity is pro-rated for startup timing in the year.
Source: Fertecon, CRU, Nutrien July 17, 2018Expect Improvement in Global Phosphate Market 28
Global Phosphate Operational Capability & Demand Global Utilization Rate1
Million Tonnes P2O5 Percent
60 100%
Demand Operational Capability
50 95%
40 90%
30 85%
20 80%
10 75%
0 70%
Low operating rates in China projected to balance the market in the short-term; demand
growth projected to exceed capacity additions from 2020-forward
Source: CRU, Nutrien July 17, 2018
1 Based on estimated operational capabilityThank you!
For further information please visit Nutrien’s website at: www.nutrien.com
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