- BMO Capital Markets calls the breakdown of the Belarus Potash Company (BPC) cooperative between Uralkali (URALL.PK) and Belaruskali "the end of the potash world as we know it."
- "Discipline and price-over-volume leadership in the potash industry seem to have crumbled, and we expect a major exit by investors out of potash producers (POT, MOS, ISCHF.PK, IPI, AGU, SQM and CMP) and the fertilizer sector in general," firm says. "We believe potash earnings estimates will move materially lower, but industry multiples will likely lower too as investors question why potash producers still deserve historical premium multiples over diversified miners."
- One final note: "Perhaps Uralkali is simply attempting to shock the market to encourage Belaruskali to reconsider marketing together, but these discussions would likely have already happened behind the scenes."
- Premarket: POT -13%. MOS -12.8%. ISCHF.PK -16.5%. AGU -12.5%. SQM -3%.
"The end of the potash world as we know it"
Jul 30 2013, 07:05 ET