Potash demand to hit decade high next year—Uralkali
Russian potash miner Uralkali (LON:URALL), the world's No.1 producer of the fertilizer, said Friday it expects global demand for the commodity to jump next year to a 10-year high, thanks to declining prices that are allowing sales to pick up.
In an interview with Bloomberg, the chief of sales and marketing Oleg Petrov, said the firm expects global demand for potash to reach between 58 and 60 million tons.
The figure is slightly higher than the 57 million metric tons reached in 2011, which was the highest in eight years.
Uralkali also said that its new volume-over-price strategy could push potash prices down 25% to $300.
Prices for potash have fallen by about a third to roughly $340 a tonne from the start of the year, with buyers delaying purchases in anticipation of further declines.
The deceleration of the Chinese economy, a driving force behind potash demand, had already helped cut potash prices by a third or more by early this year. And the disappearance of one of the two export cartels in the potash sector has only made things worse.
The industry is said to be currently operating at around 70% of its capacity, a relatively weak level that will get worse if demand does not improve, say analysts.