Uralkali Cuts Potash Output Target, Delays New Asian Deals
OAO Uralkali, the largest producer of potash by output, cut its 2012 production target and said supply deals with China and India may be signed later than expected.
Uralkali will produce and sell 10 million metric tons of the fertilizer this year, Chief Executive Officer Vladislav Baumgertner told reporters in Moscow today. That compares with a forecast of 10.2 million to 10.5 million tons unveiled in April.
The company, based in Berezniki, Russia, is among producers coping with weak demand for the form of potassium used to make plants more drought resistant. Potash Corp. of Saskatchewan Inc. cut output at Canadian mines in the first quarter, while Mosaic Co. (MOS), the biggest U.S. producer, said it planned to reduce production 20 percent because of lower demand for the material.
Uralkali advanced 0.6 percent to 229.49 rubles by the close of trading in Moscow.
World potash use this year and next won’t exceed 2011’s 57 million tons, Baumgertner said. New large potash ventures will probably be delayed and only so-called brownfield projects based around already existing infrastructure may succeed, he said.
Uralkali expects to sign potash-supply contracts with China and India no earlier than August, Baumgertner said. The company previously agreed a second-quarter deal with China after failing to get a half-year accord and said it would seek to sign a new contract for the second half. It previously proposed to complete an agreement with India in as early as July.
To contact the editor responsible for this story: John Viljoen at email@example.com.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.