China Starting Uralkali Antitrust Probe Weeks Before Price Talksby
Russian Economy Minister Ulyukayev hopes investigation is fair
Action may give China extra arguments in talks: Raiffeisenbank
China began an antitrust probe into Uralkali PJSC as little as a month before the country and the biggest potash producer are set to negotiate prices for supplies of the fertilizer.
Russia’s Economy Minister Alexei Ulyukayev hopes China’s decision in the case will be fair and the issue resolved, he told reporters after meeting Chinese officials, Interfax said Tuesday. The ministry’s press service confirmed the comments, while Uralkali officials declined to respond to questions.
The Berezniki, Russia-based company expects to start supply talks in December, Vladislav Lyan, its marketing director, said this week.
"China could have started the probe to have additional arguments," Konstantin Yuminov, an analyst at Raiffeisenbank in Moscow, said by phone. The nation, the largest consumer, will probably agree to $275 a metric ton next year, down from $315 in 2015, he said.
The effect of any Chinese fine, possibly as much as $70 million, will be "negligible" given the company’s expected $2 billion of earnings before interest, taxes, deprecation and amortization, BCS Financial Group analyst Oleg Petropavlovskiy said in a report. Uralkali’s shipments of potash to China totaled about 2.3 million tons last year, BCS estimates.
Uralkali shares were little changed in London and Moscow by 4:51 p.m. in the Russian city.