After the board of Potash (NYSE:POT) officially rejected the bid from BHP Billiton (NYSE:BHP), CEO Bill Doyle said in an interview the company is worth billions more than the offer from BHP.
Boyle noted, “Two years ago we hit $240 and in the meantime we have been adding capacity through our capital program of expansions.”
The highs for Potash would be valued at close to $71 billion if that's what the would bring.
Although current market conditions couldn't justify those numbers, taking into account the surety of increased demand for potash and other fertilizers in the years ahead does give Potash some support and justification for pushing up the price, and they very well could get billions more, especially if it ends up being a bidding war.
This could happen because of the sector they're in, as several emerging markets, especially China, don't have the fertilizers needed domestically to handle their growing demand, and so are looking for partnerships or deals to address that large need.
Rumors have several companies from China being interested in Potash, but price is a factor, along with leverage, which could punish a company for a long period of time if both are exorbitant.
Showing posts with label Potash China. Show all posts
Showing posts with label Potash China. Show all posts
Monday, August 23, 2010
Friday, August 20, 2010
China May Bid on Potash (NYSE:POT) Says JPMorgan (NYSE:JPM)
JPMorgan's (NYSE:JPM) Ian Henderson, who manages about $7 billion in resource assets for the financial institution, says there's a strong possibility China may make a bid for Potash Corp. of Saskatchewan Inc. (NYSE:POT), now that BHP Billiton (NYSE:BHP) has revealed it's interested in acquiring the fertilizer giant.
Henderson noted in a Bloomberg Television interview, that China and Brazil may be interested, but China is “dependent upon potash exports so they are a big customer of Potash Corp.," while “Brazil does have its own potash reserves and these can be developed and I think Vale is increasing their own production plans already.”
From China the most likely companies to make a bid include the sovereign wealth fund, China Investment Corp.; Sinochem Group; or Sinofert Holdings.
Included in the resources Henderson manages are mining stocks such as BHP Billiton and Vale SA ((NYSE:VALE), a Brazilian natural resources company.
Henderson noted in a Bloomberg Television interview, that China and Brazil may be interested, but China is “dependent upon potash exports so they are a big customer of Potash Corp.," while “Brazil does have its own potash reserves and these can be developed and I think Vale is increasing their own production plans already.”
From China the most likely companies to make a bid include the sovereign wealth fund, China Investment Corp.; Sinochem Group; or Sinofert Holdings.
Included in the resources Henderson manages are mining stocks such as BHP Billiton and Vale SA ((NYSE:VALE), a Brazilian natural resources company.
Thursday, May 20, 2010
Potash (TSE:POT) CEO Sees Great Future Growth
Potash (TSE:POT) (NYSE:POT) president and CEO Bill Doyle said recently the company continues to focus on the long term, and he sees some great opportunities for growth going forward.
Doyle added, when talking at an investor conference, that they did nothing to cut back on expansion during the economic downturn, and that has positioned strongly for the future when demand soars.
Looking ahead, Doyle said he sees supply not being able to meet demand in 2012-2014, as North and South America, along with emerging market giants China and India, will need a lot of the fertilizer to meet their needs.
A number of the expansion project Potash is working on will be timed right to meet that growing demand, and the company is estimated to account for over 50 percent of production growth of potash over the next decade, and along with that get the majority of the business from the countries and farmers needing it.
Potash seems to be a good long-term play, as there's no doubt once things really do begin to turn around, that focus on meeting the food needs of growing populations will become a priority again.
Once that happens, Potash will have a more consistant and predictable future, rather than the recent ups and downs they've been experiencing.
Doyle added, when talking at an investor conference, that they did nothing to cut back on expansion during the economic downturn, and that has positioned strongly for the future when demand soars.
Looking ahead, Doyle said he sees supply not being able to meet demand in 2012-2014, as North and South America, along with emerging market giants China and India, will need a lot of the fertilizer to meet their needs.
A number of the expansion project Potash is working on will be timed right to meet that growing demand, and the company is estimated to account for over 50 percent of production growth of potash over the next decade, and along with that get the majority of the business from the countries and farmers needing it.
Potash seems to be a good long-term play, as there's no doubt once things really do begin to turn around, that focus on meeting the food needs of growing populations will become a priority again.
Once that happens, Potash will have a more consistant and predictable future, rather than the recent ups and downs they've been experiencing.
Tuesday, May 18, 2010
Teck Resources (NYSE:TCK), Potash (NYSE: POT) Rebound
Potash (NYSE:POT) (TSE:POT) and Teck Resources (NYSE:TCK) (TSE:TCK-B) have rebounded nicely so far today, getting clobbered in Monday trading, as the market continues to digest the implications of the EU debt crisis and the China inflation concerns.
Teck Resources was up just under 5 percent in New York and Toronto, and was especially heavily traded in Toronto.
Potash was up about the same in Toronto and New York as well, gaining just under 1.5 percent as of about 1:00 P.M. EST.
The European debt crisis has crowded out a lot of economic news lately, but the China story has to be considered by investors as to how deeply they may cut back on imports in response to dealing with their inflation challenges.
Even a cutback of 1 percent with some raw materials or products could make a huge impact on some companies, depending on what raw materials they decide on.
Already the iron ore industry has had to lower prices in response to declining demand, although that is unique in the sense of bitter battles over price points for the material used to make steel. So that could be part of the China strategy to get a lower price.
Teck Resources was up just under 5 percent in New York and Toronto, and was especially heavily traded in Toronto.
Potash was up about the same in Toronto and New York as well, gaining just under 1.5 percent as of about 1:00 P.M. EST.
The European debt crisis has crowded out a lot of economic news lately, but the China story has to be considered by investors as to how deeply they may cut back on imports in response to dealing with their inflation challenges.
Even a cutback of 1 percent with some raw materials or products could make a huge impact on some companies, depending on what raw materials they decide on.
Already the iron ore industry has had to lower prices in response to declining demand, although that is unique in the sense of bitter battles over price points for the material used to make steel. So that could be part of the China strategy to get a lower price.
Monday, May 3, 2010
Can China Drive Potash (NYSE:POT) Profits
The more I hear coming out of China, the more it seems there is a weight over the country which may start to make producers of a variety of raw materials - including Potash (NYSE:POT) - a little nervous.
A growing number of analysts and economists think China real estate could have a bubble burst this year, which would slow down growth and put downward pressure on demand for a variety of goods.
Already China is taking measures to cool of the speculative real estate market, which may result in a 20 percent drop in property prices in the second half of 2010.
This is important for Potash and other agricultural and raw material companies because most of them are counting on China driving their revenue and profits more than any other country.
So if the China story starts to change, it could make a huge dent in the revenue and profits of Potash and many other producers of commodities and raw materials.
In other words, the growth rate of China cannot be guaranteed, and a minimum it should slow in the second half, and probably even more in the first half of 2011.
That would change the picture for everyone involved, and is probably a main factor in the price of copper continuing to be down.
A growing number of analysts and economists think China real estate could have a bubble burst this year, which would slow down growth and put downward pressure on demand for a variety of goods.
Already China is taking measures to cool of the speculative real estate market, which may result in a 20 percent drop in property prices in the second half of 2010.
This is important for Potash and other agricultural and raw material companies because most of them are counting on China driving their revenue and profits more than any other country.
So if the China story starts to change, it could make a huge dent in the revenue and profits of Potash and many other producers of commodities and raw materials.
In other words, the growth rate of China cannot be guaranteed, and a minimum it should slow in the second half, and probably even more in the first half of 2011.
That would change the picture for everyone involved, and is probably a main factor in the price of copper continuing to be down.
Thursday, February 11, 2010
Agrium (NYSE: AGU) Says Potash Demand Rising
Potash Demand
The comments by Agrium (NYSE: AGU) that potash demand is rising must be taken with a healthy measure of a grain of salt, as they are just following up on the deal their partnership with Potash (NYSE: POT), and Mosaic (NYSE: MOS) called "Canpotex" where they scored a decent but not great sale of potash to China.
According to reports, the deal was for 350,000 tons of potash, but no price was given per ton, possibly a nod toward not making that great of a deal per ton, as Belarussian Potash recently dealt potash to the Chinese for $350 a ton.
Either way, 350,000 is largely a non-event, and while helpful, doesn't have any long-term meaning to the companies involved.
With spring coming their should be an obvious increase in demand for potash, but in the end will it be the usual spring replenishing or will demand truly grow beyond seasonal adjustments?
We'll literally have to wait to see, as there are mixed signals being sent from potash companies, and that always means uncertainty going forward.
Potash Demand
The comments by Agrium (NYSE: AGU) that potash demand is rising must be taken with a healthy measure of a grain of salt, as they are just following up on the deal their partnership with Potash (NYSE: POT), and Mosaic (NYSE: MOS) called "Canpotex" where they scored a decent but not great sale of potash to China.
According to reports, the deal was for 350,000 tons of potash, but no price was given per ton, possibly a nod toward not making that great of a deal per ton, as Belarussian Potash recently dealt potash to the Chinese for $350 a ton.
Either way, 350,000 is largely a non-event, and while helpful, doesn't have any long-term meaning to the companies involved.
With spring coming their should be an obvious increase in demand for potash, but in the end will it be the usual spring replenishing or will demand truly grow beyond seasonal adjustments?
We'll literally have to wait to see, as there are mixed signals being sent from potash companies, and that always means uncertainty going forward.
Potash Demand
Subscribe to:
Posts (Atom)