LSB Industries Profits Soar Amid Global Fertilizer Supply Chaos

OKLAHOMA CITY, OK – April 29, 2026 – LSB Industries (NYSE: LXU) reported a dramatic financial turnaround for the first quarter of 2026, swinging from a loss to a significant profit as the company capitalized on a volatile global market roiled by geopolitical conflict and tight supply. The Oklahoma-based manufacturer of agricultural and industrial chemicals saw its net income climb to $19.7 million, a stark reversal from the $1.6 million net loss recorded in the same period last year.

The robust performance was driven by a surge in net sales to $169.5 million and an 79% jump in Adjusted EBITDA to $52.1 million. The results reflect a potent combination of disciplined internal operations and powerful external tailwinds, positioning the company to benefit from soaring prices for nitrogen-based products essential for farming and mining.

“I am pleased with our first quarter results, as they are in-line with our overall expectations,” stated Mark Behrman, LSB Industries' Chairman & Chief Executive Officer, in the company's press release. “Our results reflect the impact of the operational discipline we have been building and executing over the past several years. Our progress is increasingly evident over the past two quarters, driving improved operating and financial performance.”

A Market Forged by Conflict and Scarcity

The primary driver behind LSB's impressive quarter is a global nitrogen market facing unprecedented strain. A confluence of international crises has severely constricted the supply of key products like ammonia and urea, sending prices upward. The ongoing conflict in the Middle East has disrupted critical shipping lanes, with LSB noting that ammonia vessels are unable to transit through the Strait of Hormuz—a chokepoint for roughly one-third of the world's traded urea.

This disruption is not an isolated event. The market is also grappling with production curtailments in Trinidad, outages in Australia, and drone attacks on Russian nitrogen facilities. Furthermore, Russian export bans on ammonium nitrate and China's focus on its domestic supply have removed significant volumes from the global market. The effect is a ripple of scarcity that benefits producers in more stable regions like North America.

This industry-wide pressure is evident in the performance of LSB's peers. Norwegian fertilizer giant Yara and Abu Dhabi-based Fertiglobe both reported substantial profit increases in Q1 2026, citing stronger nitrogen margins and tight market conditions. Fertiglobe, despite a 12% drop in its own sales volumes due to Middle East export restrictions, saw its profits nearly double, underscoring the powerful effect of soaring prices.

Operational Discipline Meets Opportunity

While market conditions provided the opportunity, LSB's management credits its improved operational strategy for its ability to seize it. The company demonstrated agility by shifting its production mix to maximize profitability. With market conditions for ammonium nitrate (AN) particularly tight, LSB increased its sales volume of AN and nitric acid by 18% compared to the prior year.

This move proved lucrative, as the average selling price for these products jumped 15% to $372 per ton. This strategic pivot came at the expense of Urea Ammonium Nitrate (UAN) volumes, which fell 13%, but the trade-off was highly favorable. The average selling price for UAN surged by an astounding 36% to $344 per ton, more than compensating for the lower volume.

Critically, LSB achieved this profitability despite a significant increase in its own costs. The average cost of natural gas, a primary feedstock for ammonia production, rose 39% to $5.26 per MMBtu in the first quarter. However, the company's ability to command higher prices for its finished products demonstrates immense pricing power in the current environment, allowing it to absorb the higher input costs and still dramatically expand its margins.

Supporting Domestic Demand from Farm to Mine

The demand side of the equation remains exceptionally strong for LSB across both its industrial and agricultural segments. In the industrial sector, the supply of AN for explosives used in mining and quarrying is constrained across North America. With copper and gold miners maximizing production to take advantage of high commodity prices, demand for LSB's AN is robust, leading to the tight market conditions and higher selling prices.

Simultaneously, the agricultural outlook is fueling fertilizer demand. The USDA is projecting over 95 million planted acres for corn for the 2026/27 crop season. Combined with lower-than-expected fertilizer inventories throughout the supply chain, this is driving robust demand for nitrogen products ahead of the spring application season. Behrman noted the company's improved performance is enabling it to “maximize fertilizer production and support US farmers with additional supply in this difficult time,” positioning LSB as a key player in ensuring domestic food security amidst global uncertainty.

Charting a Low-Carbon Future

Beyond capitalizing on the immediate market turmoil, LSB Industries is also making strategic investments in its long-term, sustainable future. The company is advancing its El Dorado Carbon Capture and Sequestration (CCS) project in Arkansas, a key initiative in the burgeoning low-carbon ammonia market.

In partnership with Lapis Carbon Solutions, the project aims to capture and permanently sequester up to 500,000 metric tons of CO2 annually. This would reduce the facility's Scope 1 emissions by approximately 25% and allow for the production of 305,000 to 380,000 metric tons of low-carbon, or “blue,” ammonia per year.

With the pre-construction permit application resubmitted to the EPA, LSB expects the project to begin operations in late 2026 or early 2027. This forward-looking investment aligns with a broader industry trend toward decarbonization and positions LSB to serve future markets for clean energy, where low-carbon ammonia is viewed as a key fuel for shipping and power generation, as well as a clean hydrogen carrier. This dual strategy of maximizing current opportunities while building a foundation for a greener future highlights the company's ambition to remain a leader in its field for years to come.