Mosaic Says $600-a-Ton Potash Unsustainable on Rising Output
Mosaic Co. (MOS), the largest U.S. potash producer, said additional supplies from so-called brownfield expansion projects will make prices unsustainable above $600 a ton through 2020.
Potash will “spike” above $600 at some points, Chief Executive Officer James T. Prokopanko said today at an industry conference organized by Dahlman Rose & Co.
“We don’t see, with the current crop of brownfields going on, that the world’s going to have a sustainable potash price over $600 a ton for the balance of this decade,” he said.
Prokopanko said potash prices are currently “strong,” as crop prices stay high.
“We have strong farmer demand based on just great farmer economics,” he said.
Potash producers are expanding output as the global population surpasses 7 billion and rising prosperity in developing nations puts pressure on food supplies. Mosaic, based in Plymouth, Minnesota, is bringing on about 200,000 tons of capacity at its Colonsay and Esterhazy mines in Saskatchewan.
OAO Uralkali (URKA) plans to spend $5.8 billion to raise annual production capacity by about 80 percent to 19 million metric tons by 2021, the Berezniki, Russia-based potash miner said in October. Potash Corp. of Saskatchewan Inc., the world’s largest potash producer by market value, plans to raise capacity at existing mines to 17.1 million tons by 2015 from an estimated 11.3 million this year, RBC Capital Markets said Oct. 26.
Mosaic fell 2.2 percent to $54.58 in New York.
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