CF · 10-Q · 2026Q2 · Full report

Natural Gas Costs

CF Industries Holdings, Inc. · 2026-08-06 · Importance 42 · Surprise 40

Natural gas remained a key manufacturing input, with the company’s realized natural gas cost increasing 14% to $4.01 per MMBtu in the first six months of 2026. Higher natural gas costs increased consolidated cost of sales by $73 million year to date. The increase reduced ammonia gross margin by $47 million and UAN gross margin by $14 million, while granular urea benefited from lower realized natural gas costs in the second quarter but faced higher costs year to date. The company also reported higher natural gas costs at its PLNL operating affiliate, partially offsetting the benefit of higher ammonia prices.

Key facts

• As of June 30, 2026, our open natural gas derivative contracts consisted of natural gas basis swaps for 15.6 million MMBtus of natural gas compared to 13.5 million MMBtus as of December 31, 2025. source
• In the six months ended June 30, 2026, cost of natural gas used for production increased 14% to $4.01 per MMBtu from $3.52 per MMBtu in the six months ended June 30, 2025, resulting in a decrease in gross margin of $73 million. source
• Natural gas represented approximately 36% of production costs in the first six months of 2026 and 34% of production costs for the year ended December 31, 2025. source
• Cost of natural gas including realized derivatives Jan–Jun 2026: $4.01 per MMBtu, increased $0.49 per MMBtu or 14% from $3.52 per MMBtu in Jan–Jun 2025. source
• Average daily market price of natural gas at the Henry Hub was $2.93 per MMBtu for the three months ended June 30, 2026 compared to $3.16 per MMBtu in the three months ended June 30, 2025. source
• Cost of natural gas used for production in cost of sales was $3.37 per MMBtu in Q2 2026 compared to $3.36 per MMBtu in Q2 2025. source
• An increase in realized natural gas costs, including the impact of realized derivatives, decreased Other segment gross margin by $2 million. source
• Cost of natural gas including realized derivatives Q2 2026: $3.37 per MMBtu vs $3.36 per MMBtu in Q2 2025. source