English

Uralkali's talks with Chinese customer are “complicated” by Belaruskali’s marketing efforts, report says

 

Russia's potash producer Uralkali is about to negotiate a new contract with a major Chinese customer, but the negotiations are “complicated” by its former partner Belaruskali’s marketing efforts, Kommersant reported Friday with reference to a source familiar with the situation.

According to the Russian newspaper, the contract may be signed before Chinese New Year’s Day (January 30), with the price expected to be between $300 and $320 per ton.

Meanwhile, Belaruskali, which has found itself with a large unsold stock, estimated at more than 300,000 metric tons, following Uralkali’s July 2013 move to break up the two potash giants’ marketing cartel, is making an active effort to find buyers, which may complicate the deal, the newspaper said.

According to the Belarusian Statistical Committee (Belstat), Belaruskali's potash output decreased by 14.1 percent year-on-year in the first 11 months of 2013, totaling 3,917,800 metric tons.

In November, potash output amounted to 246,000 tons, 10.9 percent less than the previous month and 13.9 percent less than in November 2012, Belstat said.

Potash exports decreased by 9.3 percent year-on-year in the first 10 months of 2013 to total 2,932,800 tons, with 120,900 tons going to CIS countries, nine percent less than in the same period the previous year, and 2,811,900 tons going to non-CIS countries, 10.5 percent less.

Export prices averaged out at $622 per ton, a decrease of 15 percent.

The Belarusian economy and finance ministries expect potash exports to total 6.6 million tons in 2014, with prices averaging out at $306 per ton.

Uralkali's potash output reportedly totaled 10 million tons in 2013, 9.9 percent more than in 2012, with its output in Q4 amounted to 2.8 million tons, a 61-percent year-on-year increase.

While speaking to a group of Russian journalists in Minsk in October 2013, Alyaksandr Lukashenka said that Uralkali’s move “killed the company” and led world potash prices to fall from $900 to $230 per ton.

The issue of potash deliveries may be discussed during the January 19-24 visit to China of a Belarusian delegation led by Prime Minister Mikhail Myasnikovich. //BelaPAN