Aug. 9, 2013, 9:44 AM
- Potash (POT +1.5%), Mosaic (MOS +2.4%) and Intrepid Potash (IPI +1.4%) shares move higher at the open following upgrades by BGC Partners, which says there is "too much at stake" for the two parties involved in the Belarusian Potash venture to remain independent for a while longer.
- The firm raises each stock from Hold to Buy, setting a $37 price target on POT, a $50 target on MOS and a price target of $16 on IPI.
Aug. 8, 2013, 12:50 PM
- Agrium (AGU +3.5%) says it plans to complete the expansion of its Vanscoy potash mine in Saskatchewan despite the breakup of Belarusian Potash, which raised fears of a drop in prices (earnings call).
- Construction of the $1.7B project, which is ~40% complete, is expected to boost potash capacity by 60% to as much as 3.2M metric tons by the end of 2014.
- CEO Mike Wilson sees no changes at Canpotex, which it owns jointly with Potash (POT +3.2%) and Mosaic (MOS +5%) to sell Saskatchewan potash offshore, praising the cost structure and relationships with customers.
Aug. 8, 2013, 11:41 AM
- Potash (POT +3%) bonds teeter near junk status as traders bet the breakup of a cartel for the crop nutrient will lead to lower prices; POT's implied rating has dropped to BBB-, one level above junk, based on the cost to insure against losses in its bonds.
- "What is very helpful in a cartel-like environment is stability - when that unwinds, it can be very volatile and violent," a trader says; POT says its ability to raise cash in the debt market is "not in question."
- S&P cut its outlook on POT’s credit rating to negative from stable on Aug. 6, citing the threat of lower prices.
- Other implied ratings are BBB- for Agrium (AGU +3.6%) and A- for Mosaic (MOS +3.7%).
Aug. 7, 2013, 5:46 PM
- Potash (POT) CEO Bill Doyle says he doesn't expect the breakup of the Russian potash cartel to last long, expects no changes for North America's Canpotex cartel, and says there are no plans at POT to alter strategy.
- Doyle dismisses Uralkali's prediction that prices could drop 25% to $300/ton as a result of its split from BPC and its push to ramp up production, saying POT has seen no sign of it in the past week and doesn't expect to see it.
- Emphasizing volume sales over price is not new to the potash industry, he says, going as far back as the 1970s, and producers that do so end up hurting themselves more than anyone else.
Aug. 6, 2013, 3:31 PM
- Fertilizer stocks, especially potash stocks, surged following a rumor that Uralkali (URALL.PK) is considering rejoining the potash cartel it destroyed last week.
- Intrepid Potash (IPI -3.9%) spiked more than other fertilizer stocks because it's the only U.S. potash pure-play, Briefing.com reported; IPI had dropped 45% since the close on July 29.
- Mosaic (MOS -1.7%), Potash (POT -0.2%) and Agrium (AGU -1.6%) all jumped on the news before settling back; CF Industries (CF -1.6%) also rose ahead of its earnings report.
Aug. 5, 2013, 3:42 PM
- Potash (POT +2%) shares enjoy solid gains following remarks by Russian producer Uralkali’s CEO that consolidation would be a logical step for the sector when potash prices fall to a level of marginal producers, though it's too early to predict possible deals as the valuation of individual companies is now unclear.
- Mosaic (MOS +1.2%) also is higher amid rumors it might be a takeover target for BHP Billiton (BHP +0.3%).
- Agrium (AGU -0.5%) is left out of the gainers after shares are downgraded at Stifel Nicolaus.
Jul. 31, 2013, 2:21 PM
- Although some analysts hold out hope that potash producers Uralkali and Belaruskali can settle their differences and reverse the damage from yesterday's breakup, Uralkali's CEO says it's not happening although he could consider joining with Belarus in a Swiss-based trading company.
- He believes new global potash projects will be delayed, and sees global potash demand rising to 59M-60M tons in 2014 from 54M-55M tons in 2013.
- Separately, Potash (POT -4.9%) confirms the Toronto Stock Exchange's approval of a previously announced ~43.35M share repurchase program.
- MOS -2.8%, IPI -7.4%, AGU -2.1%, SQM -4.9%, CF -0.5%, RNF -1%, TNH -1.3%, UAN -0.4%.
Jul. 31, 2013, 12:59 PM
- Compass Minerals (CMP +1.1%) bounces back a bit from yesterday's 18% swoon due to the potash turmoil, perhaps thanks to an upgrade from J.P. Morgan.
- CMP shares trade at an EV/EBITDA multiple of 10.3x based on 2014 estimates vs. its specialty chemicals peer group at 9.3x, and vs. fertilizer peers, Potash (POT) and Mosaic (MOS), at 7.8x and 7.2x, respectively, the firm says in rating CMP Neutral for year-ahead performance.
Jul. 31, 2013, 11:48 AM
- Analysts widely expect the expected potash price war will bring an end to BHP’s $14B Jansen potash development project in Saskatchewan, but WSJ's Robb Stewart says maybe not.
- BHP has never wanted to join a cartel, Stewart writes, preferring open market pricing like it was instrumental in driving for iron ore; had BHP succeeded with its 2010 bid for Potash (POT), it was planning to market its potash outside the Canpotex cartel.
- The easiest choice for BHP may be to keep Jansen simmering in the background while working on getting the numbers for the project to add up and the potash industry adapts to the possible early arrival of market-based pricing.
Jul. 31, 2013, 11:32 AM
- Fertilizer stocks extend their steep slide begun yesterday after Uralkali pulled out of the cartel that controlled Russian exports: POT -4.7%, MOS -5.3%, AGU -2.7%, SQM -7.2%, IPI -7.8%.
- Perhaps the players should have seen it coming, as "Russia is not a joiner" - the country’s commodities producers have a long history of cutting prices to gain market share.
- "The end of the potash world as we know it" is not an exaggeration, FP's Peter Koven writes, as the move blows up the industry’s entire oligopoly business model.
Jul. 31, 2013, 8:58 AM
- Goldman Sachs downgrades Potash (POT) and Mosaic (MOS) to Neutral with respective price targets of $24 and $35, and cuts Intrepid Potash (IPI) to Sell with a $9 target in the wake of the breakup of the Russian potash cartel.
- The firm estimates POT's marginal cash cost of production at ~$300/metric ton, 30% below recent spot prices, which it believes is now likely to be seen by year-end.
- Valuation support remains limited, the firm says, with global mining peers trading at 5.5-6x EV/EBITDA still suggesting 30%-plus downside potential for the group.
- POT -1.8%, MOS -1.9%, IPI -2.1% premarket.
Jul. 30, 2013, 7:10 PM
- The breakup of the potash cartel could benefit U.S. farmers and eventually trickle down to U.S. consumers, analysts say.
- A 25% drop in potash prices to ~$300/ton by year-end could save the average U.S. corn farmer ~$10/acre in production costs, which would cut total costs by 3% for many producers.
- Top fertilizer stocks Potash (POT), Mosaic (MOS) and Agrium (AGU) suffered big hits today as lower potash prices will impact earnings, but U.S. farmers could wind up using more of the crop nutrient; potash now accounts for ~21% of U.S. fertilizer consumption.
- Large diversified agribusiness companies, such as Monsanto (MON), shouldn't be directly affected by the potash turmoil.
Jul. 30, 2013, 3:17 PM
- Canada's investors and economy will feel the sting from the potash bombshell out of Russia, at least in the short term, CIBC's chief economist says.
- Potash production in Canada accounts for 0.5% of GDP and ~1.5% of Canadian exports; a drop of 25% in volumes this quarter - not unreasonable, as buyers wait and see how low prices go - would mean a 0.4% annualized drop in Q3 GDP. (EWC -1.2%)
- Potash (POT -16.6%) shares already were facing pressure from weakening prices, leading it to cut its earnings outlook just last week.
Jul. 30, 2013, 12:45 PM
Jul. 30, 2013, 10:43 AM
- Credit Suisse calls the dismantling of one of the world's largest potash partnerships "a complete game changer," with share prices in the sector possibly cut in half. "Our guys are saying don't go anywhere near" the big fertilizer names; "we would not be bottom fishers here."
- JPMorgan is out defending the group, thinking Mosaic (MOS -21.4%) should be down $8 and Potash (POT -20.9%) down $5; says a $50/ton drop in pricing would knock EPS by $0.75 for MOS and $0.40 for POT, far better than peers.
- IPI -29.5%, CMP -26.8%, AGU -3.8%, UAN -2.5%, CF -0.2%.
Jul. 30, 2013, 9:12 AM
POT vs. ETF Alternatives
Other News & PR