$MOS: The "Hormuz Arbitrage" Nobody is Talking About. Why the Market is Wrong about the Sulfur Crisis.
u/Cueg ·
Reddit — r/wallstreetbets
· April 14, 2026 at 22:30
· ⬆ 69 pts
· 💬 137 comments
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AI Summary
Summary
The post argues that Mosaic ($MOS) is uniquely positioned to benefit from a Middle East supply crisis, as it has a cost advantage on key inputs (sulfur, ammonia) while its main competitor (OCP Group) faces production cuts.
The author's thesis is that the market has mispriced MOS at book value, and a re-rating to ~$52/share is mathematically justified by its input cost advantages and increased pricing power.
Quality assessment: Speculation with some researched elements. It cites specific data (prices, contracts, competitor news) but makes significant forward-looking assumptions about sustained price spreads and competitor shutdowns. The author is clearly a bullish holder of positions.
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The market is pricing **Mosaic ($MOS)** at $24 like it’s a victim of the Middle East crisis. It’s the opposite. Mosaic is the only phosphate producer on Earth with a "Triple Moat" while the world is on fire.
# 1. The Sulfur Trap (Geographical Alpha)
Hormuz is closed. 50% of seaborne sulfur is gone. India and China are paying **$900+/ton**.
* **The Reality:** Mosaic uses **molten sulfur** from US refineries. It’s liquid, hazardous, and physically "trapped" in the US.
* **The Spread:** Mosaic is paying **\~$500** in Tampa while their competitors pay $900. That’s **$400/ton of pure alpha** just for being in Florida.
# 2. The Ammonia "Cheat Code"
Global ammonia is in a total supply-side panic because Gulf exports are shut in.
* **The Lock:** Mosaic has a long-term contract with **CF Industries** for 725,000 tons/year.
* **The Price:** It’s indexed to **US Natural Gas (Henry Hub)**. US gas is cheap and totally decoupled from the global chaos. While everyone else's ammonia costs are vertical, Mosaic’s are essentially fixed.
# 3. Your Main Competitor is Dying
Mosaic’s biggest global rival, **OCP Group (Morocco)**, is **shutting in 30% of their production**. [https://www.argusmedia.com/en/news-and-insights/latest-market-news/2809545-morocco-s-ocp-to-cut-production-in-2q](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2809545-morocco-s-ocp-to-cut-production-in-2q)
* **The Reason:** They import millions of tons of sulfur from the Gulf. With Hormuz closed, they have no raw materials.
* **The Squeeze:** OCP is the world's largest exporter. With 30% of their volume vanishing, global DAP/MAP prices are heading to **$1,200+**. Today's data shows Mosaic already surged exports by **85,700 tons** to fill the gap, and they just got a bid at **$840 a ton** [https://www.argusmedia.com/en/news-and-insights/latest-market-news/2813448-us-mosaic-sells-40-000t-of-dap-for-south-asia](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2813448-us-mosaic-sells-40-000t-of-dap-for-south-asia)
# 4. Asymmetric Upside: The Math
The stock is trading at **$24**, which is literally **Book Value**. It physically cannot go lower without the market claiming their mines and Florida ports are worth zero.
If we assume a conservative **$400/ton cash profit**
* **Phosphate Volume:** \~7.0 Million Tons
* **Phosphate EBITDA:** $2.8 Billion
* **Total Company EBITDA (Inc. Potash):** \~$4.2 Billion
* **The Re-Rate:** At a standard 6x EV/EBITDA multiple, the enterprise value hits **$25B**. After backing out debt, that implies a share price of **\~$52**.
**The Play:** You are buying a company at its floor ($24) with a mathematical path to **$50+** once the market realizes they are the only ones left standing with cheap and locked in US-based inputs.
**TL;DR:** OCP is shut in. Chinese phosphates closed and gone. US Refineries = Cheap Molten Sulfur. CF Contract = Cheap Ammonia. $MOS is the last man standing in a global fertilizer famine.
My winning positions. I'm expecting a 20x when Mosaic hits $60 a share.
https://preview.redd.it/hpzn0nafh8vg1.png?width=1961&format=png&auto=webp&s=b4b1d368338b541f0c5fb66eda636a4e4922bc4c
Mosaic ($MOS) is a buy due to an asymmetric opportunity created by Middle East supply disruptions, which give it a massive input cost advantage over global competitors and will lead to significantly higher profits and a stock re-rating. The author presents data on sulfur/ammonia price disparities, a fixed-cost ammonia contract with CF Industries, and competitor OCP's production cuts due to sulfur shortages from the Gulf. These factors create a "triple moat," allowing MOS to maintain lower production costs and capture higher margins as global fertilizer prices rise, filling the supply gap left by competitors. The stock, trading at book value (~$24), has a clear path to ~$52 based on calculated EBITDA expansion and a standard sector multiple, representing a double. DOJ investigation and lawsuits (per comments), resolution of the Middle East crisis re-opening supply, demand destruction from high fertilizer prices, and execution risks.