AdvanSix Prices Through Cost Spike as Fertilizer Demand Softens

Sulfur costs have been a bigger problem. The Tampa sulfur marker closed at a record $705 per long ton in the third quarter, up from $655 in the second. AdvanSix estimates every $100 per long ton move costs it roughly $35 million a year.

Looking ahead, management expects the typical $10 million to $15 million sequential earnings headwind from the fall fertilizer fill program to be larger than usual in the third quarter. Elevated sulfur costs and competitive liquidation of leftover channel inventory by traders are pressuring fill program economics. The company plans to grow ammonia sales volume 30% in 2026 against 2025's already record year, and it is applying for a USDA grant to expand ammonia capacity. Management also pointed to a stronger cash flow picture in the back half of 2026, citing lower capital spending and working capital tailwinds from the fourth-quarter fertilizer pre-buy program. The 45Q carbon capture tax credits will also contribute.

Hedge fund ownership in AdvanSix rose to 28 funds in the most recent quarter from 26 the quarter before. Short interest sits at just 2.35% of the float, a level that signals little organized skepticism toward the stock even after a quarter that saw EBITDA and EPS decline sharply.

The fall fertilizer fill program will test whether AdvanSix can maintain pricing in the face of elevated sulfur costs and competitive inventory liquidation, management said.