Potash prices expected to steady
Although hesitant buyers and weak demand directed sentiment in the potash market during the last quarter of 2012, many producers and some industry analysts believe steady demand growth will return, reports Potash Investment News.
Prices are unlikely to fall below current levels of $400 to $420 per tonne now that China and India, which are major consumers of the crop nutrient, have signed major contracts.
Canpotex — a North American selling agency for miners like PotashCorp (NYSE:POT,TSX:POT), Mosaic (NYSE:MOS) and Agrium Inc. (NYSE:AGU, TSX:AGU) — has made recent deals with the two countries that have been setting the scene for market prices.
Despite these contracts being settled at lower prices, they still paint an optimistic forecast in contrast to previous dismal industry ones.
India inked a deal for 1.1 million tonnes at $427 per tonne, down from a high of $530 per tonne during the year before. Meanwhile, China agreed on 1 million tonnes of potash at an estimated $400 per tonne, down from $470 last year.
The Indian contract was $11 per tonne higher than analysts had predicted.
Demand by markets in North and South America are also expected to help stabilize prices.
Image courtesy PotashCorp