Israel Chemicals, the world's third biggest listed fertilizer producer, said it may be heading for second successive quarter of recovering fertilizer sales, despite "low" demand for potash while China remains out of the market.

The company attributed much of the blame for a 72% slump to $240.5m in revenues from potash in the April-to-June quarter to a shutdown in sales to China, after a 300,000-tonne supply deal expired at the end of last year.

And it was "still uncertain if and when" a new China contract would be agreed, ICL said, adding that the potash market "continues to show relative weakness".

The comments come amid protracted industry talks with China over a renewal in potash sales, after producers last month struck a deal with India at $460 a tonne, about 25% less than they had been hoping for.

'Demand pick up'

However, ICL said that Brazil's potash market was showing a "considerable level of activity", and added that group fertilizer sales were running at a higher rate than in the second quarter, which had in turn been an improvement over the first three months of the year.

The group's phosphate division, while falling into a loss in the April-to-June period, had also shown signs of revival.

"Demand started to pick up," ICL said, highlighting that takings in the latest quarter were, at $236.2m, 60% higher than in the January-to-March period.

Market reaction 

Group earnings slumped 78% to $158.8m on revenues down 48% at $1.08bn, figures ahead of analysts' forecasts.

However, ICL stock ended down 0.8% at 45.25 shekels in Tel Aviv.