Senior Vice President, Sales, Market Development and Supply Chain at CF Industries
Thanks, Tony. The first half and second quarter of 2022 saw a continued positive operating environment for CF Industries. Strong global demand and high natural gas prices in Europe and Asia push global nitrogen prices to all-time highs. As a result, we achieved record average selling prices for all segments, even as poor weather affected the North American planting and application season.
As we look ahead to the second half of the year, we believe the environment will remain favorable for our company. European and Asian producers are facing extremely high natural gas costs, creating supply uncertainty at a time of resilient agricultural-led demand. Last week prices at the Dutch TTF natural gas hub exceeded $60 per MMBtu. This would put ammonia production costs for efficient plants in Europe above $2,000 per metric ton. At current product prices, this production is not sustainable, which is why we have seen several producers in Europe including BASF, Yara OCI and Fertiberia curtail ammonia output. Producers with the option to import ammonia may be able to run upgrades profitably. For those who cannot, the European off-season is likely to be very difficult and we could see further curtailments and increased nitrogen imports into Europe.
At the same time, government actions continue to play a role in limiting global supply, Since October of last year. Chinese government policy has materially restricted urea exports. We do expect a seasonal increase in Chinese export volume in the second half of the year, but appears total exports in 2022 will be well below last -- the level of last several years. In contrast, the supply of fertilizer from Russia outside of ammonia has returned to near-normal levels as trade flows have adapted over the last several months.
This environment, together with typical seasonal demand led by India and Brazil has created substantial demand outside of North America for all nitrogen products. We evaluate these opportunities on a daily basis. For the past several weeks, the value of all major nitrogen products has been substantially at parity on a nutrient basis. This allows us to use our manufacturing system flexibility to optimize our product mix and meet global demand in the form and location that maximizes margins. As a result, we have built our largest export book ever across all our products.
Given the demand outside of North America, we offered a limited UAN fill program this year. We launched it at a price point about 40% higher than last year and completed the program quickly. Between fill and our export book and our fall ammonia position, we are well positioned for the months ahead. In the coming months, we expect the highest margin opportunities to shift rapidly between regions where product is most needed. With resilient demand and constrained supply, the global nitrogen market is likely to be short fertilizer it needs, if product prices do not incentivize greater production in high-cost regions.
With that, let me turn the call over to Chris.