Shares in potash groups extended a recovery amid ideas that a change of control at Russia's Uralkali may allow the reformation of the Belarusian Potash Company cartel, and after data showing surprising resilience in prices of the nutrient.
Uralkali shares rose 6% to 188.88 roubles in Moscow, while stock in German-based peer K+S rose 2.5% to stand at E23.15 in Frankfurt and, in New York, Intrepid Potash added 5% to $15.87.
These share prices represented amongst the highest since Uralkali at the end of July revealed that it was quitting the BPC cartel with Belaruskali, on claims that its Belarusian peer was selling significant quantities outside the consortium.
The break-up of BPC, which controlled more than 40% of world trade in potash, spurred fears of a collapse in potash prices, with Uralkali itself forecasting a drop from some $400 a tonne potentially below $300 a tonne.
From break-up to make up?
However, hopes of a resolution between Uralkali and Belaruskali - which appeared even dimmer after Belarus arrested Vladimir Baumgertner, the Uralkali chief executive, last month – have been revived by talk of a change of ownership at the Russian group.
Vladimir Kogan, an ally of Russian president Vladimir Putin, is believed to be attempting to buy-out the top three shareholders in Uralkali, including billionaire Suleiman Kerimov, who was also on the Belarus arrest list.
Potash group share prices, (change since close Thurs September 12)
Intrepid Potash: $16.10, (+14.0%)
K+S: E23.14, (+8.3%)
ICL 29.80 shekels, (+6.0%)
Mosaic: $46.44, (+4.6%)
Uralkali: 188.88 roubles, (+4.4%)
PotashCorp: Can$34.15, (+4.1%)
Agrium: Can$94.44, (+3.4%)
SQM: $31.62, (2.2%)
Prices as of 18:45 UK time, (13:45 New York time)
This move, on which Uralkali has yet to comment, has raised hopes among potash investors of a Belaruskali-Uralkali reconciliation which, in repairing price discipline, would bode well for profits throughout the industry.
"Belaruskali has indicated that renewed co-operation with Uralkali would require a change in strategy or ownership," Cantor Fitzgerald analyst Peter Prattas said.
As an extra fillip for investors, data late from PotashCorp, the Canadian potash giant, showed potash prices at Vancouver docks, the North American benchmark market, remaining stable at a little over $400 a tonne last month, defying expectations of a slump post the BPC break-up.
The market firmness tallies somewhat with comments from Oleg Petrov, the Uralkali head of sales and marketing, last week, as the group unveiled a drop in earnings, that there has been "some sort of stabilisation" in the US market, although he saw prices there at about $385 a tonne.
And it came as North American producers, who had heralded extra summer shutdowns this year beyond what is needed for maintenance, revealed that output had fallen for a third successive month in August - dropping below 1m tonnes for only the second time in three years.
Inventories fell 6.0% month on month to 2.63m tonnes, the lowest since October, although still well above average levels.
Some commentators have warned against expectations of an immediate reconciliation between Belaruskali and Uralkali, given the extent of the bad blood between exhibited since the break-up in late July.
"Distrust between the two sides and among all industry participants has only gotten worse since," Mr Prattas said.
"We do not expect Uralkali to make any big concessions simply to end the dispute quickly. Nor is Aleksandr Lukasenko [the Belarus president] likely to lose face and easily concede on major issues."
Indeed, the Belarusians may have some "allegiance" to China, a big investor in the country, but also the top potash importer, which has been pressing for lower prices.