Fertiliser prices increase 15% says PotashCorp

Fertiliser giant PotashCorp, one of the world’s largest potash producers, has said fertiliser prices have rebounded 15% in the last three months on the back of “improved market fundamentals”. However, the increase is coming from a very low base when prices were at decade lows earlier this year. Overall, potash prices are still very weak compared to previous years.

Reporting third-quarter results for July to September, the Canadian fertiliser giant said it had achieved “strong engagement” in nearly all of its key potash markets which resulted in record sales volumes of 2.53m tonnes. The group said it saw accelerated shipments to Brazil and South America ahead of the key planting season.

ADVERTISEMENT

However, despite the record volumes, the value of potash sales from July to September fell 25% to $453m year-on-year, while the gross margin on potash sales plunged by almost two-thirds (-64%) to $106m compared to last year.

PotashCorp, which is based in the Canadian province of Saskatchewan, said the average price of potash during the quarter was $150/t, down 40% from an average of $250/t in 2015. For nitrogen, PotashCorp said pricing was back across all its product categories to an average of $200/t compared to $319/t in 2015. This resulted in a 28% decline in nitrogen product sales to $333m, while the gross margins on nitrogen sales more than halved (-57%) to $69m.

Phosphate prices were typically back 28% in the period from an average of $538/t last year to $385/t in 2016.