Mosaic Says Rising Potash/Phosphate Prices Boosted Net Sales

Higher potash and phosphate prices boosted Mosaic’s (NYSE:MOS) net sales by 12 percent in Q4 2017, the company said on Monday (February 19). 

Mosaic said its diammonium phosphate sold for an average price of $348 per tonne, up from $317 per tonne in 2017, while potash sold for an average price of $188 per tonne, up from $169 the previous year.

The company’s net sales totaled $2.1 billion compared to $1.9 billion last year. President and CEO Joc O’Rourke said Mosaic had a strong fourth quarter and entered 2018 with “positive market momentum.”

He added, “[t]he addition of Vale Fertilizantes, the construction completion of the Ma’aden phosphate project and progress on the Esterhazy K3 complex further enhance our position as a world class, global fertilizer company.”

Although fertilizer prices appear to be improving, the company reported a net loss of $107 million for the 12 months ended December 31, 2017, compared to net earnings of $298 million in 2016.

Arab Potash Company also recently reported that its 2017 net profits rose 41 percent in 2017. Its MOP sales increased 16 percent from 2016, setting a new record for the company.

Chairman Jamal Al-Sarayrah said the rise in sales was due to stronger demand from China and India in addition to rising potash prices. China imported 7.5 million tonnes of potash in 2017, a 10.5-percent increase over 2016, according to customs data. The Fertilizer Association of India has said that potash imports during 2017 amounted to 4.3 million tonnes, a 25-percent increase over imports in 2016.

For its part, Israel Chemicals (NYSE:ICL) reported Q4 2017 sales of $1,361 million compared to $1,338 million for Q4 2016; its total 2017 sales came in at $5.42 billion compared to $5.36 billion for 2016.

ICL said the rise is sales in Q3 2017 was “driven by a recovery in the potash market.” ICL shipped about 1.3 million tonnes of potash to Brazil in 2017, “marking record annual sales for this market.” According to CRU Group, the average price of potash in Brazil for Q4 was $280 per tonne, 5 percent higher than Q3 2017 and 19 percent higher than Q4 2016.

The Brazilian National Fertilizer Association has observed that 9.23 million tonnes of potash were imported into Brazil in 2017, up 5 percent from 2016 and an all-time record for the country.

2018 is expected to be a better year for potash. Last month, chemical equity analysts at Bernstein Research forecast a rebound in the potash market after two years of low prices, with demand slated to grow 2.5 percent in 2018, or 1.6 million tonnes. The analysts expect major producers such as Nutrien (TSX:NTR,NYSE:NTR) and Mosaic to curtail production if needed by the market.

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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.