Inventory Positioning: The Hidden Lever
Inventory levels determine who benefits when discounts are rolled back.
Closing Inventory Estimates (Dec-25)
| Company | Inventory (approx.) | Strategic Implication |
|---|---|---|
| FATIMA | ~135k tons | Highest pricing leverage |
| EFERT | ~88k tons | Balanced volume + cost play |
| FFC | ~56k tons | Lowest pricing torque |
This hierarchy matters.
When inventories are high, producers must discount aggressively to clear stock. When inventories fall, pricing power returns. Companies with larger inventories experience sharper margin recovery once discounts end.
This sets up a structural distinction:
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FATIMA benefits most from pricing normalization
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EFERT benefits steadily via cost control
-
FFC benefits least, but remains stable
Gas Policy: Where Earnings Are Actually Made (or Protected)
Fertilizer profitability in Pakistan is fundamentally a gas pricing story.
Engro Fertilizers (EFERT): What Changed — and What Didn’t
From your supplied disclosures and Topline Research:
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105 MMSCFD gas allocated from Mari HRL reservoir
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Shift from “as-available” to firm supply
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Backup supply approved via Mari Energies if HRL depletes
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31 MMSCFD at PKR 580/mmbtu
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Remaining supply at PP-12 pricing
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Weighted average feed gas cost ~PKR 1,400/mmbtu (CY26F)
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~5% lower than previous estimates
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Gross margin uplift: >60 bps (~32%)
However—and this nuance matters—you correctly noted:
