Fertilizer Markets and Finance

WINNIPEG, Manitoba, May 22 (Reuters) - Russia’s Uralkali OAO would delay two of its potash mine expansion projectsfor as long as a decade if rival BHP Billiton gave final approval to building the world’s 

biggest mine of the crop nutrient, Uralkali’s chief executive said in an interview.

“This uncertainty is mostly due to BHP project,” Chief Executive Vladislav Baumgertner said in an email exchange with Reuters. “If Jansen is developed, then we will postpone the realization of Solikamsk-3 expansion and Polovodovsky by five to 10 years.”

Russian fertilizer producer EuroChem aims to start production at its two potash mines around 2017, its chief financial officer said on Wednesday, even as some other producers of the crop nutrient put expansion plans on hold. Privately-held EuroChem is expanding despite concerns about a future global glut of potash, which boosts yields of crops like corn.

It plans to reach full output capacity of 8.3 million tonnes of potash by 2022, diversifying from its current portfolio of nitrogen and phosphate fertilizers.

“We take a long-term view that demand for potash will resume,” EuroChem CFO Andrey Ilyin said on the sidelines of the BMO Farm to Market conference in New York, after giving a presentation. “We see that playing out, maybe not this year (or) next year, but we take a 10-, 20-year view.”

U.S. producer Mosaic Co said on Monday it would delay expanding Canadian potash output, and Vale SA said in March that it planned to pull out of a $6 billion potash project in Argentina

Read more at AG Professional

Caution from one of the world’s largest potash producers is likely to temper 2013 potash demand figures, but will not significantly change projected g

Russian potash behemoth Uralkali (MCX:URKA) is cautioning investors that the potash demand rebound anticipated for 2013 may not be as big as initially expected.

After its 2012 financial results, released on April 10, showed that its 2012 revenues fell by 6 percent, to $3.95 billion, Uralkali told investors that weak Indian potash demand and unfavorable weather conditions in select regions will temper overall demand this year.

Uralkali projects that global potash demand in 2013 will hit 53 to 54 million metric tons (MT), slightly higher than 2012’s 51 million MT, but lower than earlier projections from analysts and other potash producers.

Read more at Potash Investing

Russian fertilizer company Uralkali (URKA.RS) said Friday its potash production rose 8% in the first quarter compared with the year earlier to 2.08 million metric tons.

In the same period last year, the company produced 1.92 million tons.

In December, Uralkali said it would cut its production capacity to 50% in the first quarter because of falling demand, largely driven by a delay in signing supply contracts with China and India.

But in January, the company reached a 1-million-ton deal with China at $400 per ton, and in February it reached a 1-million-ton deal with India for $427 a ton.

Write to Lukas I. Alpert at lukas.alpert@dowjones.com

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Uralkali (LSE: URKA), one of the world’s largest potash producers, today announced that the Russian Federal Agency for Subsoil Use (Rosnedra) has extended the term of exploration and mining for the licences at Uralkali’s working mines.

Uralkali holds licences for seven blocks of the Verkhnekamskoye field. The licences for the Ust-Yayvinsky and Polovodovsky blocks are valid until 2024 and 2028, respectively. Five other licences, which were to expire on 1 April 2013, have been extended:

• licence for the northern part of Solikamsky block (Solikamsk-1) - until 1 January 2018
• licence for the southern part of Solikamsky block (Solikamsk-2) - until 1 January 2021
• licence for the Novo-Solikamsky block (Solikamsk-3) - until 1 January 2018
• licence for the Durymansky block (Berezniki-2) - until 1 January 2021
• licence for the Bygelsko-Troitsky block (Berezniki-4) - until 1 January 2018

The reserves at Uralkali’s mines will be depleted much later than the licences expire. The Company, therefore, intends in future also to extend its licences timely and in line with the legislation.

MINSK – Belarussian Potash (BPC), a joint venture between potash producers Uralkali and Belaruskali, expects the fertiliser market to recover this year, allowing it to lift some premium prices that have fallen in the last few months.

BPC, whose prices help set a benchmark for the crop nutrient’s market, raised its spot price for Brazilian buyers by $15/t to $465/t last month after cutting the price in January for Chinese importers to $400/t from $470/t and signing a deal with Indian buyers at $427/t in early February.

“The potash fertiliser market is indeed recovering. The market conditions allowed us to revise prices for Brazilian importers,” BPC CE Valery Ivanov said in an emailed reply to questions from Reuters.

“We do not rule out that we will have a chance to review our prices in other regions as well.”

Potash contracts with big importers like China and India typically set a floor for global prices, with spot buyers like Brazil paying a premium.

BPC’s Indian and Chinese deals covered supplies of one-million tons each and Ivanov said he expected to sign additional sales contracts with other companies from those countries.

Read more at Mining Weekly

MINSK, 18 February (BelTA) - The Supervisory Board of Belaruskali endorsed the establishment of Soyuzkali GmbH, a trader of potash fertilizers jointly with OAO Uralkali, BelTA learned from director general of the Belarusian company Valery Kiriyenko.

“At a meeting on Friday the Supervisory Board of Belaruskali decided to register Soyuzkali GmbH given two issues are settled,” said Valery Kiriyenko. These questions relate to the exclusivity of sales, and payment for anti-monopoly procedures. These are organizational, technical issues, said Valery Kiriyenko.

Last week the Board of Directors of OAO Uralkali approved the establishment of Soyuzkali GmbH. According to the Russian company, the Russian-Belarusian company will be registered in Switzerland’s Zug. The authorized capital of Soyuzkali will make up Fr200,000. The share of Uralkali in the authorized capital of the joint venture will make up 50%. The commercial organization will be established once all necessary anti-monopoly checks are done, according to Uralkali. As reported earlier, the joint venture will sell Russian and Belarusian potash fertilizers on foreign markets. The company was expected to start operation by the end of H1 2013.

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MINSK, 15 February (BelTA) – The Board of Directors of OAO Uralkali has approved the establishment of Soyuzkali GmbH, a trader of potash fertilizers jointly with OAO Belaruskali, BelTA learned from the Russian company.

According to Uralkali, the Russian-Belarusian company will be registered in Switzerland’s Zug. The authorized capital of Soyuzkali will make up Fr200,000. The share of Uralkali in the authorized capital of the joint venture will make up 50%.

The commercial organization will be established once all necessary anti-monopoly checks are done, according to Uralkali.

Therefore, the Russian company has okays the setting up of Soyuzkali and is waiting for a relevant decision from the Belarusian side.

As BelTA reported earlier the joint venture will sell Russian and Belarusian potash fertilizers on foreign markets. The company was expected to start operation by the end of H1 2013.

At present Belarusian Potash Company (BPC) is the sole exporter of potash fertilizers produced by Belaruskali and Uralkali. BPC was founded in 2005. The shareholders are Belaruskali (45%), Belarusian Railways (5%) and Uralkali (50%). Belarusian Potash Company accounts for more than 40% of MOP deliveries worldwide. BPC sells into Europe, India, China, Central and South America, the United States, the Asia-Pacific Region, Africa and the Middle East.

By G.C. Mays

When Israel Chemicals (ICL) inked their own potash deal with China recently it became clearer why Potash Corp (POT) went from wanting to increase its stake from 14 percent to wanting to acquire the fertilizer company. An acquisition would give them a new geographic point of distribution into China for Potash Corp as well as a reliable source of revenue for Sinofert Holdings Ltd, another strategic investment.

It is unclear if the deal, which is for the sale of 660,000 tons of potash during the first half of 2013, is with Sinofert. Sinofert is China’s largest importer and distributor of fertilizer. This agreement is part of a larger 3 year, 3.3 million ton agreement. According to Israel Chemicals, the sale price per ton is in the neighborhood of the $400 price Canpotex negotiated at the end of December on behalf of its three members.

This deal happens while Potash Corp waits on election results in Israel. Available results show that the greatest number of seats in the Knesset, which is Israel’s legislative branch, will go to Netanyahu’s party. Potash Corp recently abandoned a bid to increase its stake in Israel Chemicals in June.

Read more at Seeking Alpha

The contract reached between Sinofert Holdings (HKEX:0297) and Canpotex, the potash export arm of Potash Corporation of Saskatchewan (TSX:POT,NYSE:POT), Mosaic (NYSE:MOS) and Agrium (TSX:AGU,NYSE:AGU), will see 1 million tonnes of potash exchange hands in the first half of 2013.

The price of the contract, which The Globe and Mail reported is about $400/tonne, represents a decline of $70/tonne from the previous contract signed between Canpotex and China. The agreement is expected to set the tone for other deals signed through contracts and spot-price purchases.

Depressed 2012 fertilizer demand from India and China is a key component of the price decline.

Southeast Asia saw the biggest decline in potash demand in 2012, with a 1.9-million-tonne, or 20.2-percent, fall off compared to 2011, according to data collected by the Financial Times.

India saw the biggest proportional decline, with a reduction of 34.8 percent, or 1.6 million tonnes, in 2012. The drop came on the back of a devaluation of the country’s currency and the return of government subsidies for fertilizers.

India is the next big customer in line to ink a deal with Canpotex, but when that contract will be settled is currently anyone’s guess. The country is completely dependent on foreign supplies of potash, but does make use of alternative products, principally urea; it last signed a contract in August 2011, according to The Globe and Mail.

Read more at Potash investing News

Potash may be the subject of a “flurry of buying”, driving a “strong rebound” in sector share prices, after China agreed a second import deal for the fertilizer, this time with former Soviet Union producers, AltaCorp analysts said.

Belarusian Potash Company - the marketing consortium for Belarus-based Belaruskali and Russia’s Uralkali - revealed it had agreed to sell up to 1.0m tonnes of potash to Chinese buyers for $400 a tonne in the first half of the year.

The deal followed a similar agreement with Canpotex, the North American potash marketing consortium, two weeks ago - for 1.0m tonnes also at $400 a tonne for the January-to-June period – a contract which followed months of wrangling on deal terms.

And, even if the prices of the deals was below market expectations, the elevate volumes evident in both contracts should boost sentiment, Canada-based broker AltaCorp said.

‘Strong rebound in demand’

“Given the large size of these two contracts, we suspect this should start a flurry of buying as concerns about securing sufficient supply for the spring planting season may start to emerge,” AltaCorp analyst John Chu said.

“We believe these two contracts will set the stage for a strong rebound in potash demand and put a halt to sliding potash prices.”

Read more at Agrimoney

Belarussian Potash Co., the trading arm for Belaruskali and Russian potash producer Uralkali (URKA.RS) agreed Monday with top Chinese importers Sinochem International Corp. (600500.SH) and CNAMPGC to a contact for 1 million metric tons of potassium chloride for $400 a ton for the first half of 2013.

The contract calls for a firm commitment of 700,000 metric tons with a option for an additional 300,000 metric tons, BPC said.

“New contracts with our Chinese partners are a positive signal for the global potash market setting the floor price and anticipating significant delivery volumes. We are confident that these contracts will act as a stimulus demand in other regions and provide the basis for overall growth of the potash market in 2013,” said Oleg Petrov, Uralkali’s director for sales and marketing.

Last week, Uralkali said it had set the price for Russian fertilizer producers for the first quarter at 10,252 rubles ($332) per ton. In December, Uralkali said it would cut its production capacity to 50% in the first quarter due to lessening demand. Analysts said the fall-off in Uralkali sales was largely driven by the delay in signing a contract with China and with India. A deal with India remains unresolved.

Read more at Fox Business

Acron said it was “optimistic” over demand prospects, at a time when its fertilizer inventories have swollen by 27%, as it overcame rising raw material prices to unveil forecast-beating earnings.

The Russian producer of nitrogen-based and compound fertilizers acknowledged a “slight in dip” in prices of nutrients in the latter months of last year, “due to the off-season in most countries”.

However, the group said its expectations for the first three months  of 2013 “are optimistic, since current prices on agricultural products are fairly high, stimulating growers in most parts of the world to use more fertilizers while prices remain acceptable”.

An uptick in demand would come at a time when the group revealed that the value of its overall inventories had swollen to 11.67bn roubles as off the end of September, up 27% since the start of 2012, although the pace of increase had slowed over the summer, thanks in part to temporary capacity shutdowns.

Inventories were 5.1% higher by value than at the end June.

Fertilizer production in the July-to-September period was, at 1.32m tonnes, 14.4% lower than a year before.

Read more at Agrimoney

DENVER, Jan. 8, 2013 /PRNewswire/ — Prospect Global Resources, Inc. (NASDAQ: PGRX) today stated that recently announced potash pricing of $400 per metric ton for shipments to industrial companies in Asia in the first half of 2013 validates the Company’s operating model and the value of the 10-year offtake agreement that it signed last fall with a major Chinese buyer.

In its Preliminary Economic Assessment of December, 2011, Prospect Global projected operating expenses of approximately $98 per metric ton of potash extracted. An updated Cost Feasibility Study on October 18, 2012, stated that operating expenses remained comfortably within confidence levels set by the December, 2011, preliminary economic assessment. At current pricing, such expenses would create significant operating margins, the Company said.

“Recent global potash prices further validate the cost infrastructure of Prospect Global’s operations,” Chief Executive Officer Patrick L. Avery said.

On October 22, 2012, Prospect Global and Sichuan Chemical Industry Holding (Group) Co., Ltd. of Chengdu, China, jointly announced a more than $2-billion, 10-year agreement under which Sichuan will purchase at least 500,000 metric tons of potash annually, or 25% of the projected output of Prospect Global’s American West Potash field in Holbrook, AZ.

“At current market levels, the long-term arrangement with Sichuan would yield attractive returns,” Mr. Avery said.

Sichuan Chemical is a state-owned enterprise that is China’s third-largest chemical company and one of its largest fertilizer manufacturers.

http://www.prnewswire.com/news-releases/potash-price-of-400-per-metric-ton-validates-prospect-global-resources-china-contract-186076482.html

The FEDERAL ASAHI docked at the Port of Wilmington to discharge potash. Photo by Susan N. Pridgen