Aug. 28, 2013, 2:59 PM
- Tensions between Russia and Belarus continue to escalate after the arrest of Uralkali's (URALL.PK) CEO, as Russia reportedly orders its oil companies to cut supplies to Belarus by 25%.
- BMO says Belarus likely will be pressured into releasing the CEO but not likely that the cartel-like potash arrangement can be re-formed given the “breakdown in trust"; the issue going forward is whether Uralkali’s stance on potash volumes is maintained or revised.
- POT -0.7%, MOS +0.9%, AGU -1%, IPI -0.1%, SQM -1.1%.
Aug. 27, 2013, 10:34 AM
- Potash companies slide as yesterday's arrest in Belarus of the head of Russian potash company Uralkali (URALL.PK) threatens to turn into a major diplomatic row.
- The recriminations, and a threat by Belarus to hold CEO Vladislav Baumgertner for at least two months, suggest there is little hope of an early reconciliation in the potash dispute that has already lowered prices.
- The break-up of Belarusian Potash could have serious consequences for Belarus, where potash made up more than 7% of exports last year.
- POT -1.1%, MOS -1.8%, AGU -0.4%, IPI -1.6%, SQM -0.8%.
Aug. 26, 2013, 3:15 PM
- The potash spat continues to get uglier, as Belarus investigators reportedly intend to seize property and assets of Russia's Uralkali (URALL.PK) following the collapse of the joint Russian-Belarussian potash venture.
- Investigators say Uralkali had inflicted $100M in damages to Belarussian interests.
- Belarus earlier today detained Uralkali chief Vladislav Baumgertner, drawing a fierce rebuke from Moscow.
- POT +2.9%, MOS +1.7%, AGU +3.6%, IPI +2.5%, RNF +4.6%.
Aug. 26, 2013, 8:56 AM
- The head of Russian potash producer Uralkali (URALL.PK) has been detained in Belarus on suspicion of abusing his position and official powers.
- Belarus is a staunch Russian ally, but Uralkali's surprise decision to quit the potash trading venture with BPC in July strained relations between the two countries; a cheaper potash price could hit the value of Belarus' currency.
- Separately, Uralkali reportedly is in talks to buy distributors on key markets to maximize sales, part of its new low-cost strategy.
- POT +4%, MOS +3.1%, AGU +1.6%, IPI +3.7% premarket.
Aug. 21, 2013, 11:27 AM
- HSBC downgrades potash producers Potash (POT -1.1%), Mosaic (MOS -1.8%) and Agrium (AGU -0.4%), foreseeing weak potash prices following the break-up of one of the major cartels.
- Spot prices of the fertilizer will plunge to $25/ton from $50 currently while contract prices will be set at $300/ton, HSBC predicts; prior to the breakup, contract prices were expected to reach in the upper $400s in H2.
- POT is cut to Underweight from Overweight with a $22.50 price target, MOS is lowered to Underweight from Neutral with a $33 target, and AGU is reduced to Neutral from Overweight with a $95 target.
Aug. 20, 2013, 2:35 PM
- BHP's (BHP -1.4%) decision to continue to invest in its massive Jansen potash development in Saskatchewan "add[s] salt to the wound" of potash supply, Scotiabank says, pointing out Jansen could add the equivalent of 18%-20% of the potash market over recent years.
- Jansen’s extra product might come online well after potash prices have already decreased materially, BMO Capital says, but "still, there is only so much incremental potash demand to chase incremental supply."
- POT +0.3%, MOS +0.1%, AGU +0.9%, IPI +1.4%.
Aug. 19, 2013, 3:33 PM
- The head of potash miner Belaruskali chastises Uralkali's (URALL.PK) decision to abandon its partnership through the Belarusian Potash Corp. last month, says there are no plans to return to its relationship with Uralkali under current management and will cut its own deals with buyers from now on.
- North American potash giants have been trying to reassure investors that Belaruskali and Uralkali would soon make up and restore the cartel system; today's comments would seem to contradict that narrative.
- POT -0.9%, MOS -1.4%, AGU -0.1%, IPI -1.4%, SQM -1.4%.
Aug. 16, 2013, 3:12 PM
- Indian potash buyers, the second biggest source of potash demand after China, are demanding deep discounts as Russian miner Uralkali, which shook up the sector's cartel system last month, hikes production to full capacity and threatens to send prices plunging.
- The moves will further pressure shares of global potash miners, who have already lost up to 20% of their stock market value since the breakup of the cartel.
- Today: POT -2.8%, MOS -3.1%, AGU -1.2%, SQM -1.9%, IPI -5.5%.
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.
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