China gets stake in Uralkali to secure potash supply, could weaken Canpotex


Potash stocks are lower after China acquired a 12.5% stake in Russian potash producer Uralkali (URALL.PK -1.4%), a deal that could put new pressure on prices and reduce the chances of the Russia-Belarus cartel being revived.

The deal could strengthen China's position in negotiations with other producers; China imports ~6M metric tons/year of potash, more than 10% of global demand, and the Chinese potash price is considered the global benchmark.

The deal also could give Uralkali an upper hand in selling potash in the Chinese market ahead of Canpotex, the North American potash cartel owned by Potash (POT -1.4%), Mosaic (MOS -1.4%) and Agrium (AGU -0.8%).

ETFs: MOO, CROP, PAGG, VEGI.

Comments (2)
  • mikeehlert
    , contributor
    Comments (731) | Send Message
     
    This actually is a real concern for this segment. Have a look at what China and Russia have done to the aluminum marker - $AA
    24 Sep 2013, 11:19 AM Reply Like
  • deercreekvols
    , contributor
    Comments (9712) | Send Message
     
    If you are talking aluminum, one should look at how JPM and Goldman Sachs manipulated the market right here in the US.
    24 Sep 2013, 12:07 PM Reply Like
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