Spent a couple evenings digging around the fertilizer industry and wound up focused on ammonia.
Ammonia is a fairly stable compound with a host of uses both in pure form and also for further processing into fertilizer and explosives.
The industry is pushing a "blue" ammonia narrative, that scaled carbon capture at the time of ammonia production using natural gas can achieve downstream fuel that is net-cleaner than usage of natural gas directly. Then there is a far off development of straight electrolysis to produce "green" ammonia.
Ammonia has an interesting property here - it's mostly hydrogen and can act as a relatively efficient, safe, and cheap transport mechanism for hydrogen.
The industry as a whole appears quite cyclical. Various 10q's point to corn production increasing in the short term which is great for the ammonia industry. Folks pushing blue and future green ammonia have a good narrative, but it's clearly a narrative manufactured by the industry itself and not one based on intrinsic demand outside of agriculture.
So I'm left wondering if the low PE's and potentially decent margins here are a trap. The future usages of ammonia are intriguing and present a growth opportunity. But that could be years down the road before it gets realized, and money invested today could be dead money for months if not years even if the ammonia fuel narrative bears fruit. APD is a player here that probably moved too early.
Considering a couple companies at the moment - CF, LXU. No positions yet.