Belarus’ current contract for potash fertilizer supply to China marks ‘price bottom’ – Uralkali chief
<p> MINSK, Jul 2 - PrimePress. The value of the current Belarusian-Chinese contract for the potash fertilizer supply is an effective bottom price, reckons Director General of Russia’s Uralkali Dmitry Osipov. </p> <p> </p> <p> As previously reported, the Belarusian Potash Company (BPC) reduced the price of potassium chloride exported to China by 24.1% to $220 per 1 tonne in 2020. The previous long-term contract for the supply of Belarusian potash fertilizers to China was concluded in summer 2019. In September 2018, BPC and a consortium of Chinese buyers (Sinochem, CNAMPGC, CNOOC) agreed on the supply of potassium chloride to China fr om June 2019 at a price of $290 per 1 ton. </p> <p> </p> <p> “In the largest market - China - the price of $220 per 1 tonne was set by our former trading partners from Belarus, which we consider too low. It could have been $10-20 higher. Given the specific natures of the industry and the amount of investment that manufacturers pour into capacity development, they are interested in keeping the bottom price as high as possible. Unfortunately, in the current market conditions we have to state that the current price of the Chinese contract is the "price bottom". And yes, there are companies in the potash industry for which the price of $220 per tonne is critical," Osipov told the Russian newspaper Kommersant on July 2. </p> <p> </p> <p> In his words, Uralkali is negotiating with China. “We have merchandise that we delivered to China in late 2019, but there was no contract then. The Chinese consumers did not buy it up. In 2020, we will sell this volume,” Osipov said. He said this stockpile is as large as “several hundred thousand tonnes”. </p> <p> </p> <p> "Despite the absence of a contract for deliveries by sea, we did not stop shipments by rail. And that's about 1m tonnes, which will be dispatched anyway. Of that amount we have already sold 800 thousand tons. The potash industry community is now discussing when long-term contracts are necessary. And perhaps the situation will change,” Osipov said. </p> <p> </p> <p> He predicts that in 2020 the world potash consumption will grow to 65-66 million tonnes. “Judging by Brazil, wh ere the main buyers of potash are located in small cities, now the country will have a peak in demand, and we believe that the price will go up ... Demand will in any case increase by 1.5-2% per year,” Osipov said. </p> <p> </p> <p> In his words, the potash industry is recovering quite quickly. “If we talk about the level of $500, this will probably not happen in the near future, but we have already sold products to Brazil at $340-350 per 1 tonne in early 2019,” he said. </p> <p> </p> <p> Osipov said that in 2020, Uralkali plans to produce 11 million tonnes of potash, with production capacity standing at 12 million tonnes. </p> <p> </p> <p> In his words, a return to joint trading with Belaruskali (Soligorsk, Minsk voblast) is not on the agenda now. “Over the past seven years, both companies have learned to work independently and are implementing their own marketing strategies. And everyone has got used to it. Uralkali is quite satisfied with this state of affairs,” said Osipov. End </p>
2020-07-03
Primepress
MINSK, Jul 2 - PrimePress. The value of the current Belarusian-Chinese contract for the potash fertilizer supply is an effective bottom price, reckons Director General of Russia’s Uralkali Dmitry Osipov.
As previously reported, the Belarusian Potash Company (BPC) reduced the price of potassium chloride exported to China by 24.1% to $220 per 1 tonne in 2020. The previous long-term contract for the supply of Belarusian potash fertilizers to China was concluded in summer 2019. In September 2018, BPC and a consortium of Chinese buyers (Sinochem, CNAMPGC, CNOOC) agreed on the supply of potassium chloride to China fr om June 2019 at a price of $290 per 1 ton.
“In the largest market - China - the price of $220 per 1 tonne was set by our former trading partners from Belarus, which we consider too low. It could have been $10-20 higher. Given the specific natures of the industry and the amount of investment that manufacturers pour into capacity development, they are interested in keeping the bottom price as high as possible. Unfortunately, in the current market conditions we have to state that the current price of the Chinese contract is the "price bottom". And yes, there are companies in the potash industry for which the price of $220 per tonne is critical," Osipov told the Russian newspaper Kommersant on July 2.
In his words, Uralkali is negotiating with China. “We have merchandise that we delivered to China in late 2019, but there was no contract then. The Chinese consumers did not buy it up. In 2020, we will sell this volume,” Osipov said. He said this stockpile is as large as “several hundred thousand tonnes”.
"Despite the absence of a contract for deliveries by sea, we did not stop shipments by rail. And that's about 1m tonnes, which will be dispatched anyway. Of that amount we have already sold 800 thousand tons. The potash industry community is now discussing when long-term contracts are necessary. And perhaps the situation will change,” Osipov said.
He predicts that in 2020 the world potash consumption will grow to 65-66 million tonnes. “Judging by Brazil, wh ere the main buyers of potash are located in small cities, now the country will have a peak in demand, and we believe that the price will go up ... Demand will in any case increase by 1.5-2% per year,” Osipov said.
In his words, the potash industry is recovering quite quickly. “If we talk about the level of $500, this will probably not happen in the near future, but we have already sold products to Brazil at $340-350 per 1 tonne in early 2019,” he said.
Osipov said that in 2020, Uralkali plans to produce 11 million tonnes of potash, with production capacity standing at 12 million tonnes.
In his words, a return to joint trading with Belaruskali (Soligorsk, Minsk voblast) is not on the agenda now. “Over the past seven years, both companies have learned to work independently and are implementing their own marketing strategies. And everyone has got used to it. Uralkali is quite satisfied with this state of affairs,” said Osipov. End