Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

'Expect record phosphate, potash shipments in 2018', says Mosaic

Twitter Linkedin eCard

Mosaic flagged "positive developments" in the phosphates sector, despite Chinese exports topping expectations, forecasting that world shipments of the nutrient, and of potash, will hit record highs in 2018.

However, the group's shares tumbled nonetheless, standing 7.2% lower at $22.40 in afternoon deals in New York, in selling attributed to disappointment at short-term guidance.

The fertilizer giant, the world's biggest producer of finished phosphate products, in its first forecast for next year pegged global phosphate shipments at 68m-70m tonnes.

That would represent an improvement on the 67.5m tonnes expected for this year, an estimate narrowed from a previous figure of 66.8m-68.3m tonnes.

"Expect record phosphate and potash shipments in 2018," Mosaic said, foreseeing potash volumes at 63.5m-65.5m tonnes, potentially overhauling the current high set in 2014.

China factor

"We are seeing positive developments in the phosphate industry following a challenging 2016," said Joc O'Rourke, the Mosaic chief executive, adding that this improvement was coming despite a surprise rise in Chinese exports of the nutrient.

"Chinese exports in the first half of 2017 have been higher than we originally estimated," Mr O'Rourke said.

"But we continue to expect China to export fewer tonnes of phosphates this year compared to last year," when volumes reached 9.5m tonnes, in turn down on the 11.6m tonnes seen in 2015.

Nonetheless, Mosaic raised to potentially above 9m tonnes its forecast for China exports this year, from a previous estimate of about 8m tonnes.

Chinese producers were scheduled to meet last weekend to set new export prices for Chinese potash, after values fell below the previous threshold of $350 a tonne.

'Strong demand'

Demand for phosphates, and potash, meanwhile, was "strong", Mr O'Rourke said, with Mosaic selling 2.58m tonnes of the nutrient in the April-to-June quarter, at the top end of the company's guidance range, and up 133,000 tonnes year on year.

The average selling price of diammonium phosphate, a benchmark phosphate product, at $336 a tonne was also at the top end of company guidance, although down $7 a tonne year on year.

Operating profits in phosphates more than doubled to $30m.

In potash, meanwhile, operating profits more than quadrupled, to $85m, helped by spending cuts, as well as a benefit from 7.4% increase to 2.19m tonne in sales volumes, with the average sales price essentially flat at $179 a tonne.

"Potash results reflect excellent cost control," Mr O'Rourke said.

Ahead of forecasts

Group earnings came in at $97.3m, compared with an after tax loss of $10.2m a year before, and equivalent to $0.29 per share, excluding one-off factors.

That was ahead of market expectations of a $0.23-per-share result.

However, the shares tumbled 9.0% at one point, in selling viewed as spurred by guidance that diammonium phosphate selling prices for the current, July-to-September quarter will fall back to $310-330 a tonne, and volumes ease to 2.2m-2.5m tonnes.

"Somebody's obviously selling on the future," Joc O'Rourke, the Mosaic chief executive, told Reuters, while flagging that raw material prices were on the decline, as well as sales values.

By Mike Verdin

Twitter Linkedin eCard
Related Stories

Will protein prices fight back against fat in dairy markets?

Prices of fats remain elevated against protein values in dairy - at a time when the opposite is true in markets for oilseed products

World phosphate, potash shipments to grow in 2018, helped by Chinese needs

Mosaic forecasts further demand expansion, as it heralds a "transformational year" for its own fortunes, after a 2017 marred by a one-time tax charge

Deere lifts sales hopes - even as it unveils biggest loss in 25 years

The maker of John Deere tractors flags "strengthening" market conditions, but swallows a huge writedown prompted by US tax retorms

Plant Impact agrees takeover by Croda, after failure of Bayer contract

The crop enhancement group, floored by the failure of a supply deal with Bayer, agrees a takeover by a maker of chemicals from anti-wrinkle creams to floor coatings
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069