PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 15:04 UK, 11th Feb 2016, by William Clarke
Potash and phosphate prices to weaken further, says Mosaic

Potash prices will come under further pressure at the start of this year, US fertilizer group Mosaic said, amid a "challenging environment".

Mosaic expects to sell potash, a key crop nutrient, for $200-230 a tonne over the first three months of 2016.

This compares to an average selling price of $254 a tonne in the previous three month period.

Canadian broker Raymond James this week saw granular potash prices in the Midwest at $284 a tonne.

Sales fall

Mosaic forecast global potash shipments for 2016 at 58-60m tonnes. This is in line with forecasts of global potash demand made by fertilizer group Agrium this week, but behind the 59-62m tonne forecast made by PotashCorp on Tuesday.

Total sales volumes for the Mosaic's potash segment are seen at 1.5-1.9m tonnes for the first quarter of 2016, down from 2.0m tonnes over the same period last year.

Mosaics potash sales are falling, after a decision to reduce volumes in the face of low prices.

Full year potash sales volumes were seen at 7.5-8.5m tonnes.

Weaker phosphate prices

Phosphate prices will also fall, Mosaic said.

Phosphate prices were seen at $350-370 a tonne over the first three months of this year, down from $410 a tonne over the last three months of 2015.

Raymond James saw diammonium phosphate prices in Florida ports priced at $355 a tonne this week.

Mosaic saw 2016 global phosphate shipments at 65-67m tonnes.

Mosaic forecast sales volumes for its phosphates segment down to 1.8-2.2m tonnes in the first three months of 2016, down from 2.3m tonnes in the same period last year.

Full year sales were seen at 9-10m tonnes.

Profits drop

The news came as Mosaic reported a sharp drop in profits, albeit by less than analysts had forecast.

Mosaic reported a profit of $155.0m in the three months to December 31, down 57% year-on-year.

Adjusted earnings were down 39%, at 53 cents a share, ahead of the 44 cents a share forecast by analysts.

Falling sales

Sales were down 9%, at $2.16bn. This is better than the $1.93bn projected by analysts.

Mosaic's potash sales in three months to December 31 were down 25% year-on-year, to $572m.

Phosphate sales fell by 17% to $1.0bn.

The company managed to cut its cost of production by 16% over 2015, helped by the weaker Canadian dollar and facility closures.

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