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I"m look forward to interviewing IC Potash President and CEO, Sidney Himmel in the coming week. When discussing the future of potash pricing over the weekend, Sid commented: "It is not possible to reasonably project ranges for short- and medium-term future potash prices due to the to the July departure of Uralkali from the BPC marketing sales organization. The political machinations that followed that departure include aggressive predictions of price declines down to $300 per tonne by Uralkali CEO Vladislav Baumgartner — and by his subsequent arrest by Belarusian authorities. Forecasted prices were already subject to downward revisions, due to soft contracting by China, India and Brazil, the world"s most significant buyers of internationally traded potash. At the moment, industry consultants believe that the potassium chloride market will become increasingly competitive. Granular Brazilian spot prices have been seen in the area of $350 cfr. And the same pricing has been seen in Asia. Once the large Chinese contracts are settled, I believe that the pricing of potash is going to be affected primarily by demand factors, and secondarily by supply factors. I believe that moving forward, supply factors will be secondary because it is already clear that with regards to MOP, most expansion will come from large potash company brownfield expansions such as Vanscoy and Picadilly. There will be very limited greenfield expansions, and as this becomes obvious to all market observers and buyers and sellers of potash, prices will firm up. With greenfield capital costs of $1600 per tonne, new projects can only advance with MOP netbacks in the $500 per tonne range. Given that prices approaching $500 net to China, India or Brazil generates demand resistance, but that prices in the $400 range have been shown not to necessarily cause demand destruction, I suggest that the long-term price per tonne FOB Vancouver Standard potash will average $400." - See more at: investorintel.com/rare-earth-intel/...ls/#sthash.z8YG8gQe.dpuf
