BKK Office in Minsk
This year rather favorable for producers of potash fertilizers. The potash branch passed crisis peak last year. In 2016 the price of potash fertilizers collapsed after oil and other raw , thus large warehouse reserves of fertilizers at buyers brought down demand. That quicker and more comfortably to pass a price bottom, to the special exporter Belarusian potash fertilizers – Closed joint-stock company "Belorusskaya kaliynaya company" (BKK) – and to other players of the world potash market and last year India and China was necessary to go for reduction of price when signing with the largest consumers.
In 2016 on June 27 BKK signed the annual with India, and on July 14 – with China. For India last year contract price of potash fertilizers fell more than for USD100 for ton – to USD 227, and for China – to USD210 for ton – with USD315 for ton. Under , concluded with China last year, BKK had an opportunity to put on the Chinese market (from July to December 31, 2016) 1,3 million tons of potash fertilizers (without an option). Following the results of 2016 of BKK delivered to China 1,45 million tons of potash fertilizers. Signing of these stimulated br with br gradual to restoration of demand and the prices of potassium, including in such large spot markets, as Brazil and United States of America.
As a result, following the results of the first half of the year 2017 of BKK could increase currency proceeds from export of potash fertilizers by 31% in comparison with January-June, 2016 – to billion USD1,254. Thus the price environment urged on growth of sales: the physical volume of export of the Belarusian potash fertilizers in January-June, 2017 increased by 41% in comparison with the first half of the year 2016 – to 3,260 million tons (in terms of 100% the content of nutrients).
For comparison: in 2016 of BKK increased export of potash fertilizers – by 3% in comparison with 2015 – to 5,706 million tons (in terms of 100% the content of nutrients), in value terms export of potash fertilizers decreased, as well as the prices in the market a hlorkaliya, for 23% – to billion USD2,221.
PUBLIC JOINT-STOCK COMPANY "URALKALY" assumed leadership in signing of with China and India
the Minimum price level in branch traditionally are set by with the largest importers – China and India. China as the largest world importer of chloride potassium (this country consumes 14-15 million tons a hlorkaliya in a year – 25% of universal market size, a half of the consumption providing due to import), as a rule, the first signs , and India – the second-large contract market – usually pays an award to the price for China. Thus, on a hlorkaliya to this country serves for the market as a price reference point.
this year Russian PUBLIC JOINT-STOCK COMPANY "URALKALY" took over the lead at BKK on signing of with leading importers. In the middle of July, 2017 PUBLIC JOINT-STOCK COMPANY "URALKALY" the first of the largest players agreed about long-term supply of fertilizers with consortium of the Chinese buyers – Sinochem, CNAMPGC and CNOOC. Sources note that the company agreed with China on during the period from August to January, 2017 of 600 thousand tons of chloride potassium. Contract price is raised by USD11 for ton – to USD230 for ton.
at the end of July, 2017 PUBLIC JOINT-STOCK COMPANY "URALKALY" reported to br about signing with IPL – the largest Indian importer of mineral fertilizers – on a hlorkaliya from August, 2017 to June, 2018. is signed on USD240 for ton, (%2B by USD13 for ton to level of last year).
According to existing practice, other players sign new with China at the same price, as the first signed the trader.
V BKK noted that volumes of deliveries to China under the new for 2017 are comparable to capacities of 2016 year. Thus in BKK paid attention that the current demand in China and inquiries from the Chinese partners exceed real possibilities of BKK and Republican unitary enterprise "Production association "Belaruskaly" on deliveries to the Chinese market. "It is caused, first of all, by late coordination by the Chinese party of the price the current year and redistribution of volumes of on other markets", – noted in BKK.
Experts expected bigger
the Situation in the potash market in 2017 essentially differs from the last year's. According to forecasts, world demand for potash fertilizers in 2017 can increase to 62-63 million tons from 61 million tons in 2016. Potassium stocks in the markets of the main import countries of fertilizers decreased rather last year, besides, good demand is shown by the spot markets. Plus positive trends in China (increase in demand for difficult fertilizers, and respectively, granulated hlorkaliya for their production), India (a favorable monsoonal season) and Brazil (a good harvest of corn).
All this gave trumps to producers in negotiations with leading importers China and India. Therefore profile experts did not exclude also more essential growth of the price for China – to USD250 for ton.
"This year PUBLIC JOINT-STOCK COMPANY "URALKALY" became the first producer who has signed , having replaced the leader of last year – BKK which before 2 years in a row became the first. In both cases – when in March, 2015 the price in 315 USD/mt, and in July, 2016 – 219 USD/mt (then, contrary to norms, it occurred 2 weeks later after signing the Indian at the price of 227 USD / mt) – the company underwent criticism from other producers (as, in their opinion, established too low prices) was coordinated. However we considered this level as achievement in view of adverse conditions of the market of that time. Now we are not satisfied with price level … That lack of discipline in the potash market which we now observe, proved at an inopportune moment: in a year when leading suppliers could be focused on establishment of the highest under the current conditions of level of the price from which subsequently it would be possible to go down a little", – the analyst Sakhnova Helena from Public joint-stock company "Bank VTB" considers the Capital.
Are solidary with this opinion and in BKK. In the company note that during several rounds of official negotiations with the Chinese buyers "worked over considerably big increase in the price, considering an upward price tendency in the world market". thus experts advise br to br also to pay attention that the market China – the most low-marginal. Therefore it is important as the largest world players estimate this year demand in the potash market. That is, whether they will be able to export more than fertilizers on more bonus markets or will be compelled to deliver more fertilizers to China.
the Competition will prevent a rise in prices
at the end of March, 2017 in Turkmenistan put in operation the 1,4 million tons per year Garlyksky potash combine (by the way, it is constructed by the Belarusian experts).
In May, 2017 the German company on production of potash salts and the mining industry, K%2BS AG put into operation new potash mine in Canada (the first mine constructed in Canada for 50 years). The total cost of the largest project for the German company made billion EUR3,1. By the end of 2017 the new mine has to come to full capacity in 2 million tons. Potash fertilizers it is planned to deliver to United States of America, to South America and Asia.
Experts in this regard note that the American market of potash fertilizers is already presented by such giants as Potash Corp, Agrium and Mosaic. The competition in the market is so high that the prices of potash fertilizers here already practically reached a nine-year minimum. According to data from BMO (Bank of Montreal – Montreal), from the moment of the beginning of an exit of K%2BS AG on hlorkaly fell to the American market of the price almost twice, to USD250 for ton.
we Will note br also that by the end of 2017 the EuroChem company JOINT-STOCK COMPANY "MINERAL AND CHEMICAL COMPANY "YEVROKHIM" plans to start production of potash ore to Russian Federation on the Gremyachinsky field to Volgograd region, combine power – 2,3 million tons a hloraliya in a year. JOINT-STOCK COMPANY "MINERAL AND CHEMICAL COMPANY "YEVROKHIM" also builds potash mine on the Verkhnekamsky field in Perm territory where also plans to realize the potash project of Company "Akron".
"Taking into account entry into the market of new volumes are the K%2BS projects, JOINT-STOCK COMPANY "MINERAL AND CHEMICAL COMPANY "YEVROKHIM", the GOK to Turkmenistan – the current price probably is local peak. This year was a window for rise in prices, and producers used it. Further, at best, the price will remain at the current level on condition of good demand and if producers hold volumes, but subsequently it will go down against market glut", – the analyst "Public joint-stock company "Bank VTB" the Capital" considers White Kevin .