Belarusian Potash Co. Agrees to Supply Potash to China for $315 Per Tonne

- March 19th, 2015

Bloomberg reported Thursday that Belarusian Potash Co. has signed a deal with China and will supply the country with potash at a price of $315 per tonne which includes shipping costs. Russia’s Uralkali (LSE:URALL) reportedly said the price was “significantly” less than possible, despite it being up $10 per tonne from last years price.

Bloomberg reported Thursday that Belarusian Potash Co. has signed a deal with China and will supply the country with potash at a price of $315 per tonne which includes shipping costs. Russia’s Uralkali (LSE:URALL) reportedly said the price was “significantly” less than possible, despite it being up $10 per tonne from last years price.

As quoted in the market news:

The price China pays for potash has been the market benchmark for more than a decade and is usually set at the start of the year. This year, China’s higher inventories and falling prices on the domestic spot market allowed buyers to stretch negotiations well into March, raising concerns that the biggest potash consumer would drive down prices worldwide or settle for spot purchases over contracts.

The Belarus contract “underscores the newfound competitive intensity in global potash markets,” Goldman Sachs analysts said in a note. “We believe news of a $10 per metric ton price increase will be viewed negatively by the market, where major producers had been publicly aiming for up to a 10 percent increase.” Goldman Sachs had used a Chinese contract price of $320 per metric ton in its models, according to the note.
Elena Kudryavets, head of Belarusian Potash Co., commented:

Signing the contract later than March would be disastrous for the market. The agreement will serve as a positive signal to the market, help to make it more active, boost stability and confidence of all participants.

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