PotashCorp flagged "ongoing tightness" in potash as it extended
the lift of one of its Canadian mines, as the market for the fertilizer showed
signs of a small recovery in prices too.
The Canadian potash group said that that it had given a "temporary
extension" in operations at its Penobsquis mine in New Brunswick, in eastern
Canada, rescinding lay-off notices for 50 staff.
The move to extend production at Penobsquis, originally
expected to cease production during the April-to-June quarter, reflected "ongoing
tightness in the granular potash market" PotashCorp said - contrasting with the
talk of loose supply conditions which has dominated the industry for much of
the last year.
However, it found some support from a report released late
on Friday by PotashCorp showing potash prices recovering marginally in the Vancouver
export market from a six-year low of $300 a tonne.
Supply vs demand
Indeed, the report showed inventories held by producers in North
America – with Belarus-Russia one of the big potash mining regions – falling last
month to 2.35m tonnes, their lowest since September 2012.
Inventories were 19.7% lower year on year, the largest rate
of decline since July 2011, ending up 15% below the five-year average.
The decline reflected a drop in production of 13.5% year on
year to 1.69m tonnes as producers, including PotashCorp, have curtailed output
in a market sent reeling by the collapse of the Belarusian Potash Company
cartel in July.
Meanwhile, on the consumption side, North American exports
were, at 1.11m tonnes, up 4.5% year on year.
PotashCorp shares stood 2.0% higher at Can$39.88 in afternoon deals in Toronto.
Domestic use, although down 3.4% on May 2013, was, at 1.02m
tonnes, at a historically high level.