Uralkali May Follow Potash in Cutting Output, Troika Dialog Says

OAO Uralkali, the world’s largest potash producer by volume, may cut third-quarter output because of weaker demand, Troika Dialog said.

“The strength in agricultural commodities has not yet filtered through to a firmer supply demand balance in potash, and there are indications the underlying market remains pretty soft,” Mikhail Stiskin, an analyst at Troika Dilaog, wrote in a report today. Indian demand has been hurt by a revised subsidy system, while China’s buyers are also “in no hurry to sign up for new shipments,” he said.

Potash Corp. of Saskatchewan Inc. said last week it will shut down the Lanigan mine for a month. The closure will remove 275,000 metric tons of potash from the market, according to Troika estimates.

“It is becoming increasingly obvious that Uralkali may not be able to maintain its production volumes at the level of the second quarter when it produced 2.9 million tons operating at full capacity,” Stiskin said.

Uralkali declined to comment on the report.

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