Uralkali Inks Potash Price with China

January 21, 2014 10:22 AM
 

Uralkali has reportedly inked a potash deal with China. We have been waiting to see where the price would land in this troubled time for vitamin K. Last year, a holdout on Canpotex lowered the potash price to China to $400.00/tonne. That led to an inventory overhang that slowed production.

Then, the Belorussian Potash Company remnants threatened to drive the price even lower with a price-over-volume strategy. It didn't quite pan out like either Uralkali or Belaruskali had anticipated, but the dust has settled enough for Uralkali and China to set a price at $305.00.

Uralkali reports, "Uralkali (LSE: URKA) announces that Uralkali Trading (a wholly-owned subsidiary of Uralkali) has reached agreement on H1 2014 potash deliveries to China with the buying consortium headed by CNAMPGC, one of the major Chinese agrochemical corporations."

Oleg Petrov, Uralkali Director for Sales and Marketing, commented, "The contracts between Uralkali and the Chinese companies clearly testify to growing demand and the beginning of market recovery. The terms of the agreement with our Chinese partners are mutually beneficial and serve the interests of our consumers, agricultural producers of the PRC.”

The contract is good through June, 2014 but is conspicuously short on volume at only 700,000 tonnes, suggesting China may see lower prices ahead. Here in the U.S., this week's retail potash price moved $2.94 lower to a regionwide average of $463.77.


 

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