Although there can be no doubt the bid by BHP Billiton (NYSE:BHP) for Potash Corp. (NYSE:POT) has pushed the price of the fertilizer company up beyond its market value, it is not the only factor in the soaring share price of Potash, as evidenced by increasing corn and soybean prices which is expected to increase the amount of fertilizer farmers buy for spring planting.
UBS (NYSE:UBS) agrees with that assessment as well, maintaining their "Buy" on Potash, noting their strong support based on the pricing mentioned.
"Results were the second-highest for the third quarter in company history and were 61% above the same period last year...We revised our 2010/2011/2012 estimates from $5.77/8.35/8.68 to $5.98/8.70/9.82 to reflect the higher potash prices, updated guidance and the quarterly results."
"We believe POT’s share price is being impacted by BHP Billiton (NYSE:BHP)’s hostile bid...Given the improved fertilizer market we believe the shares would be trading above $130/share in the absence of a bid. On their Q3 call POT indicated they thought the hypothetical unaffected share price could be over $155/shr. Investment Canada is expected make its decision on the potential deal on Nov 3rd," said UBS.
If the deal is rejected by Canada, we'll all see Potash shares come crashing down, finding the actual value of the company based on market factors and not the bid.
If the deal is allowed to proceed, there may not be much more than a temporary surge in share price for Potash, as a lot of that has already been priced into the shares.
Potash closed on Friday at $145.09, soaring $2.56, or 1.80 percent. UBS has a price target of $175 on Potash, increasing it from $170 a share.
Showing posts with label Potash Prices. Show all posts
Showing posts with label Potash Prices. Show all posts
Monday, November 1, 2010
Friday, October 29, 2010
Potash (NYSE:POT) CEO Sees Prices Reaching $600 a Ton
Potash Corp (NYSE:POT) CEO Bill Doyle said he sees the price of potash reaching a minimum of $600 a ton by 2013, as the increasing price of agricultural commodities may push farmers to boost production, which would in turn increase the demand for potash, and other fertilizers.
As the ongoing debacle over the BHP (NYSE:BHP) bid winds down, it's hard to trust anything Doyle says though, as his irrational and sometimes, childish, response to the bid, has caused him to be lowered in the eyes of many people and institutions.
In other words, even this assertion could be considered a ploy to affect the decision by the Canadian government on whether or not to allow the bid by BHP for Potash to go foward.
That's because Doyle has been attempting to make it look like Potash is far more valuable than the bid by BHP because of future, but unproven, projections of potash prices.
This doesn't mean there isn't a real support for potash prices moving up, just that the motives for Doyle expressing them are suspect.
Doyle concluded, "In my estimation, by 2013 you are going need prices free-on-board-mine of at least $600 to get to a level that you could get a 10% internal rate of return on a mine.
"And it's a ten year process, [so] you are going to need to move somewhere in that 2013, 2014 timeframe to have enough material available in the 2023/24 time level.
"So we certainly have the pricing power at the moment, and I see that
continuing for the next few years."
In the latest quarter of the company potash prices had average $305.60 a ton.
As the ongoing debacle over the BHP (NYSE:BHP) bid winds down, it's hard to trust anything Doyle says though, as his irrational and sometimes, childish, response to the bid, has caused him to be lowered in the eyes of many people and institutions.
In other words, even this assertion could be considered a ploy to affect the decision by the Canadian government on whether or not to allow the bid by BHP for Potash to go foward.
That's because Doyle has been attempting to make it look like Potash is far more valuable than the bid by BHP because of future, but unproven, projections of potash prices.
This doesn't mean there isn't a real support for potash prices moving up, just that the motives for Doyle expressing them are suspect.
Doyle concluded, "In my estimation, by 2013 you are going need prices free-on-board-mine of at least $600 to get to a level that you could get a 10% internal rate of return on a mine.
"And it's a ten year process, [so] you are going to need to move somewhere in that 2013, 2014 timeframe to have enough material available in the 2023/24 time level.
"So we certainly have the pricing power at the moment, and I see that
continuing for the next few years."
In the latest quarter of the company potash prices had average $305.60 a ton.
Thursday, October 14, 2010
BHP's (NYSE:BHP) Potash (NYSE:POT) Bid Opposed Because of Canpotex?
Although there has been increasing concern over the control of the potash industry by a couple of major players, including Canpotex and Belarusian Potash, it's puzzling as to why there hasn't been more support for BHP's (NYSE:BHP) bid for Potash Corp. (NYSE:POT), as they've stated they want to pull out of the monopoly once the existing agreements expire.
That raised a firestorm in Canada and among other Canpotex members Agrium (NYSE:AGU) and Mosaic (NYSE:MOS), who have been controlling prices for a long time.
You would think there would be a rally on behalf of BHP. Some think BHP would stay in Canpotex once they controlled Potash, but I don't think so.
In the past BHP has been known for moving according to market conditions of supply and demand and not holding back in order to push up the price of potash to protect margins and earnings.
So farmers and consumers would strongly benefit from a BHP takeover of Potash, and hopefully this part of the story will get out more before the foolish and irresponsible leaders of Potash go the Chinese to protect them from the BHP bid.
That raised a firestorm in Canada and among other Canpotex members Agrium (NYSE:AGU) and Mosaic (NYSE:MOS), who have been controlling prices for a long time.
You would think there would be a rally on behalf of BHP. Some think BHP would stay in Canpotex once they controlled Potash, but I don't think so.
In the past BHP has been known for moving according to market conditions of supply and demand and not holding back in order to push up the price of potash to protect margins and earnings.
So farmers and consumers would strongly benefit from a BHP takeover of Potash, and hopefully this part of the story will get out more before the foolish and irresponsible leaders of Potash go the Chinese to protect them from the BHP bid.
Tuesday, October 5, 2010
Potash (NYSE:POT) Claims Study Revenue Numbers too High
Potash Corp. (NYSE:POT), which is battling to keep from being taken over by BHP Billiton (NYSE:BHP), says a study commissioned by the Canadian province of Saskatchewan has tax revenue less than they believe it will be if BHP takes over the fertilizer company.
A report released by the Conference Board of Canada, said there would be "few" negative outcomes if BHP took over Potash, saying over a 10-year period they would amount of about $1.96 billion.
Potash lashed out at the findings, saying the figure was too low because the study didn't take into account BHP mining potash at full production.
What they mean by that is more potash on the market would lower prices, and ultimately margins, resulting in lower earnings. What Potash on the other hand neglects, is increased sales, even if at lower earnings, makes up for the loss of margins. Think Wal-Mart (NYSE:WMT) and how they turn inventory over to make up for lower margins.
So the idea there will be a lot of tax revenue lost is largely hypothetical, and can in no way be proven.
It seems there's really no reason BHP shouldn't be given the go ahead to acquire Potash other than a few people at the top of the company who may end up losing their jobs.
Otherwise the response by Potash isn't reasonable or logical. It's not that hard to figure out there's really not a reason for BHP to take over the company, and in the long run could be a major boon for farmers and others who would be able to acquire fertilizer at better prices, which would increase sales and tax revenue.
A report released by the Conference Board of Canada, said there would be "few" negative outcomes if BHP took over Potash, saying over a 10-year period they would amount of about $1.96 billion.
Potash lashed out at the findings, saying the figure was too low because the study didn't take into account BHP mining potash at full production.
What they mean by that is more potash on the market would lower prices, and ultimately margins, resulting in lower earnings. What Potash on the other hand neglects, is increased sales, even if at lower earnings, makes up for the loss of margins. Think Wal-Mart (NYSE:WMT) and how they turn inventory over to make up for lower margins.
So the idea there will be a lot of tax revenue lost is largely hypothetical, and can in no way be proven.
It seems there's really no reason BHP shouldn't be given the go ahead to acquire Potash other than a few people at the top of the company who may end up losing their jobs.
Otherwise the response by Potash isn't reasonable or logical. It's not that hard to figure out there's really not a reason for BHP to take over the company, and in the long run could be a major boon for farmers and others who would be able to acquire fertilizer at better prices, which would increase sales and tax revenue.
Wednesday, September 1, 2010
Potash (NYSE:POT) Downgraded by BMO Capital
BMO Capital downgraded Potash Corp. (NYSE:POT) from "Outperform" to "Market Perform."
A growing number of investors are questioning whether or not it's time to take profits with Potash, as it soared after the hostile bid from BHP Billiton (NYSE:BHP), which it rejected.
That rejection generated speculation BHP would sweeten the bid, making investors hold off to see if that would materialize.
BHP CEO Marius Kloppers has attempted to manage expectations there, saying the bid is a fair one, and implying he isn't going to acquire Potash at any cost.
Executives at Potash believe the bid is far too low, and are looking for a white knight to acquire the company, although that hasn't happened, suggesting the bid by BHP is indeed a fair one.
A new development which could challenge that are reports on Russian potash suppliers, who are attempting to raise potash prices in its Brazilian and Asian markets.
An earlier attempt this year failed to convince customers, so we'll have to wait to see if the price increases really happen.
If they do, then Potash would have a supportive argument for being vastly undervalued.
Russian potash producers pretty much guide the global potash prices through the Belarusian Potash Company, the equivalent of Canada's Canpotex, both marketing arms of the industry.
A growing number of investors are questioning whether or not it's time to take profits with Potash, as it soared after the hostile bid from BHP Billiton (NYSE:BHP), which it rejected.
That rejection generated speculation BHP would sweeten the bid, making investors hold off to see if that would materialize.
BHP CEO Marius Kloppers has attempted to manage expectations there, saying the bid is a fair one, and implying he isn't going to acquire Potash at any cost.
Executives at Potash believe the bid is far too low, and are looking for a white knight to acquire the company, although that hasn't happened, suggesting the bid by BHP is indeed a fair one.
A new development which could challenge that are reports on Russian potash suppliers, who are attempting to raise potash prices in its Brazilian and Asian markets.
An earlier attempt this year failed to convince customers, so we'll have to wait to see if the price increases really happen.
If they do, then Potash would have a supportive argument for being vastly undervalued.
Russian potash producers pretty much guide the global potash prices through the Belarusian Potash Company, the equivalent of Canada's Canpotex, both marketing arms of the industry.
Tuesday, June 8, 2010
BHP Billiton (NYSE:BHP) Major Potash Player
There hasn't been much noise or notice about the entry of BHP Billiton (NYSE:BHP) into the potash market, but that seems to be about to change as the reserve estimates for its potash mining project in Saskatchewan is huge, and will make them a force to be contended with in the global potash market for years into the future.
To add insult to injury to one of the major potash players, Potash Corp. (NYSE:POT), the project of BHP Billiton is located on the border of the Potash property named Lanigan. BHP's project is called Jansen.
Estimated reserves for BHP at Jansen are 3.37 billion tons of high quality potash, which includes over 25 percent potassium, the key ingredient which makes up potash.
Included with three other major potash mines currently under development, BHP is expected to produce over 20 million metric tons of potash annually, which would account for 40 percent of estimated global production in 2010.
To give an idea of how quickly that has happened, Potash Corp. produced 13 million metric tons in 2009. BHP has been at it for only about 2 years.
This would put them in the pricing drivers seat in regard to competitors and those they're supplying, which should be a big boost to the bottom line of the company.
Now it remains to be seen how the rest of the industry will respond to this major threat.
To add insult to injury to one of the major potash players, Potash Corp. (NYSE:POT), the project of BHP Billiton is located on the border of the Potash property named Lanigan. BHP's project is called Jansen.
Estimated reserves for BHP at Jansen are 3.37 billion tons of high quality potash, which includes over 25 percent potassium, the key ingredient which makes up potash.
Included with three other major potash mines currently under development, BHP is expected to produce over 20 million metric tons of potash annually, which would account for 40 percent of estimated global production in 2010.
To give an idea of how quickly that has happened, Potash Corp. produced 13 million metric tons in 2009. BHP has been at it for only about 2 years.
This would put them in the pricing drivers seat in regard to competitors and those they're supplying, which should be a big boost to the bottom line of the company.
Now it remains to be seen how the rest of the industry will respond to this major threat.
Tuesday, May 25, 2010
Potash (NYSE:POT) Among Most Efficient in their Industry
Potash (NYSE:POT) is among the most efficient companies in their industry, as its earnings for each employee stands at $219,591 over the last year. Revenue per employee during that same time period was $927,588.
Some other fertilizer companies did well too, as prices dropped they worked on cutting costs and streamlining their businesses.
Potash has said they're looking forward to stronger revenue and earnings in the growing season this year, and when addressing concerns over pricing pressures on potash fertilizer, CEO Bill Doyle said over the short term that is true, but going forward he sees a healthy price increase, and even today they're operating at margins over 60 percent.
Combining their efficiency and margins, it does look good going forward for Potash in the long term.
Some other fertilizer companies did well too, as prices dropped they worked on cutting costs and streamlining their businesses.
Potash has said they're looking forward to stronger revenue and earnings in the growing season this year, and when addressing concerns over pricing pressures on potash fertilizer, CEO Bill Doyle said over the short term that is true, but going forward he sees a healthy price increase, and even today they're operating at margins over 60 percent.
Combining their efficiency and margins, it does look good going forward for Potash in the long term.
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.
Wednesday, May 12, 2010
Potash (NYSE:POT) Upgraded to Buy from Hold - Share Price Up
The shares of Potash (NYSE:POT) have risen over 3 percent today, as a Desjardin analyst upgraded the company to Buy from Hold.
Shares of the company rose by over $3 on the news, standing at $104.61 a share at 4:12 EST.
Major factors in the decision were the fall in the share price, which was down by close to 7 percent since May 1, and Desjardins believes that the price of potash has bottomed out, and it'll start to rebound going forward.
Shares of the company rose by over $3 on the news, standing at $104.61 a share at 4:12 EST.
Major factors in the decision were the fall in the share price, which was down by close to 7 percent since May 1, and Desjardins believes that the price of potash has bottomed out, and it'll start to rebound going forward.
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.
Friday, April 23, 2010
Preview of Potash (TSE:POT) First Quarter Report
With the global recession skewing a lot of numbers, as comparisons from last year are largely irrelevant as the economic conditions were so bad, everything looks good in comparison. For Potash (TSE:POT)(NYSE:POT), that remains true to, and analysts' expectations are based on guidance given by the company, as there's little else they can go on.
So estimates for the first quarter are earnings will have a range of $1 to $2, with $1.32 being the consensus estimate. Last year during the same quarter Potash generated earnings of $1.02 a share.
The earnings have been revised upwards, as mentioned, based on guidance from the fertilizer company, increasing it from $1.27 last month to the $1.32 average mentioned above.
Guidance range before was $0.70-$1.00, and now stands at $1.30-$1.50.
A couple of things have been attributed to the increased guidance, and that was potash demand has increased in the North American market, and margins for phosphate and nitrogen grew as well.
The quarterly report is scheduled for April 26.
So estimates for the first quarter are earnings will have a range of $1 to $2, with $1.32 being the consensus estimate. Last year during the same quarter Potash generated earnings of $1.02 a share.
The earnings have been revised upwards, as mentioned, based on guidance from the fertilizer company, increasing it from $1.27 last month to the $1.32 average mentioned above.
Guidance range before was $0.70-$1.00, and now stands at $1.30-$1.50.
A couple of things have been attributed to the increased guidance, and that was potash demand has increased in the North American market, and margins for phosphate and nitrogen grew as well.
The quarterly report is scheduled for April 26.
Tuesday, April 20, 2010
Potash (NYSE:POT), Agrium (NYSE:AGU) Buying Opportunity
Potash, Agrium, other Fertilizer Companies a Buying Opportunity
Fertilizer giants Potash (NYSE:POT) and Agrium (NYSE:AGU) bot advanced strongly today as investors viewed the recent drop in share price as a buying opportunity, as fertilizer prices are expected to increase seasonally as spring demand soars.
Now that the share price of the companies are down, most investors and analysts consider them a buy, in contrast to being overpriced, as thought recently.
Mark Gulley, analyst for Soleil Securities Corp., recently raised his rating on Potash from "sell" to "hold."
Other analysts have encouraged investors to look closely at the fertilizer sector for buying opportunities in light of the recent weakness in share price.
Fertilizer giants Potash (NYSE:POT) and Agrium (NYSE:AGU) bot advanced strongly today as investors viewed the recent drop in share price as a buying opportunity, as fertilizer prices are expected to increase seasonally as spring demand soars.
Now that the share price of the companies are down, most investors and analysts consider them a buy, in contrast to being overpriced, as thought recently.
Mark Gulley, analyst for Soleil Securities Corp., recently raised his rating on Potash from "sell" to "hold."
Other analysts have encouraged investors to look closely at the fertilizer sector for buying opportunities in light of the recent weakness in share price.
Sunday, April 18, 2010
Potash (TSE:POT), Mosaic (NYSE:MOS) Price Challenge
Potash and Mosaic struggling with flat potash prices
It's not too often when potash inventories decline and the prices fall with them, but that's been the case, and consequently Potash (TSE:POT) and Mosaic (NYSE:MOS) will struggle in the short term as demand is down, which is ultimately what has driven prices south.
This is no different than gasoline, which can have similar inventory movements at times when demand is down, and prices fall as well.
With little hope of anything in the market happening to give potash prices a boost, both Mosaic and Potash were downgraded by Goldman Sachs (NYSE:GS) recently.
Prices for potash have been level at approximately $350 a ton, about 21 percent below the five-year average.
Expectations are orders from the South American market in the summer months may help the fertilizer generate some momentum.
It's not too often when potash inventories decline and the prices fall with them, but that's been the case, and consequently Potash (TSE:POT) and Mosaic (NYSE:MOS) will struggle in the short term as demand is down, which is ultimately what has driven prices south.
This is no different than gasoline, which can have similar inventory movements at times when demand is down, and prices fall as well.
With little hope of anything in the market happening to give potash prices a boost, both Mosaic and Potash were downgraded by Goldman Sachs (NYSE:GS) recently.
Prices for potash have been level at approximately $350 a ton, about 21 percent below the five-year average.
Expectations are orders from the South American market in the summer months may help the fertilizer generate some momentum.
Tuesday, March 16, 2010
Potash (NYSE:POT) Increases Guidance 50 Percent on Rising Demand
Potash guidance increased by 50 percent for quarter
Citing rising demand for its product, Potash (NYSE:POT) radically changed its guidance for first-quarter earnings from $1.00 a share to $1.50 a share, a 50 percent surge in estimate for the company.
North American and international markets both look strong according to Potash, with the North American market poised for record sales for the quarter.
The demand was driven be inventories being largely depleted, with many companies holding off to see which way the economic winds were blowing.
Normal fertilizer replacement requirements on an annual basis were also part of the estimate changes, but expectations were also surprisingly high for crops this year; maybe the primary mover along with the inventory replenishment.
The high expectations were a surprise, as grains continue to take a price beating with little change in fundamentals to make things more positive. So it does make you wonder what the expectations were based upon.
There could be a huge planting this year, depending on the weather, but that doesn't a good year make, as it's the supply and demand which has been playing havoc with grain prices in the U.S. and Canada, as many countries around the world have been increasing plantings resulting in an abundance of supply and less export demand, which has also driven down prices.
Of course for fertilizer companies that doesn't matter, as the planting is where they make the majority of their money, and if farmers have high expectations about their crops this year, they're going to reap the benefits of that, whether the farmers are correct or not.
Potash guidance increased by 50 percent for quarter
Citing rising demand for its product, Potash (NYSE:POT) radically changed its guidance for first-quarter earnings from $1.00 a share to $1.50 a share, a 50 percent surge in estimate for the company.
North American and international markets both look strong according to Potash, with the North American market poised for record sales for the quarter.
The demand was driven be inventories being largely depleted, with many companies holding off to see which way the economic winds were blowing.
Normal fertilizer replacement requirements on an annual basis were also part of the estimate changes, but expectations were also surprisingly high for crops this year; maybe the primary mover along with the inventory replenishment.
The high expectations were a surprise, as grains continue to take a price beating with little change in fundamentals to make things more positive. So it does make you wonder what the expectations were based upon.
There could be a huge planting this year, depending on the weather, but that doesn't a good year make, as it's the supply and demand which has been playing havoc with grain prices in the U.S. and Canada, as many countries around the world have been increasing plantings resulting in an abundance of supply and less export demand, which has also driven down prices.
Of course for fertilizer companies that doesn't matter, as the planting is where they make the majority of their money, and if farmers have high expectations about their crops this year, they're going to reap the benefits of that, whether the farmers are correct or not.
Potash guidance increased by 50 percent for quarter
Saturday, February 20, 2010
Canpotex Deal Helps Potash Corp (TSE:POT), Mosaic Co (TSE:MOS) and Agrium Inc (TSE:AGU)
Canpotex India Deal
The deal by Canpotex with Indian buyers to buy potash will help Canadian potash producers Potash Corp (TSE:POT), Mosaic Co (TSE:MOS) and Agrium Inc (TSE:AGU), which together own the exporting and negotiating unit of the trio.
Potash demand was down strongly in 2009, so even though this will help the companies going forward. The price of $370 a ton was in line with expectations and reveals the rebound will be one step at a time and not a large move. The deal was for 600,000 tons of potash.
Being the largest producer of potash, Potash Corp. will especially benefit from deal, accounting for 54 percent of the potash provided by Canpotex. Mosaic supplies close to 37 percent and Agrium 9 percent.
This announcement follows on the heels of 350,000 deal with China by Canpotex just a week ago. Details of that deal weren't announced.
Canpotex India Deal
The deal by Canpotex with Indian buyers to buy potash will help Canadian potash producers Potash Corp (TSE:POT), Mosaic Co (TSE:MOS) and Agrium Inc (TSE:AGU), which together own the exporting and negotiating unit of the trio.
Potash demand was down strongly in 2009, so even though this will help the companies going forward. The price of $370 a ton was in line with expectations and reveals the rebound will be one step at a time and not a large move. The deal was for 600,000 tons of potash.
Being the largest producer of potash, Potash Corp. will especially benefit from deal, accounting for 54 percent of the potash provided by Canpotex. Mosaic supplies close to 37 percent and Agrium 9 percent.
This announcement follows on the heels of 350,000 deal with China by Canpotex just a week ago. Details of that deal weren't announced.
Canpotex India Deal
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
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