MOSCOW, Jan 15 (Reuters) - Shares in Russia's Uralkali
, the world's biggest potash producer, went up more
than six percent on Wednesday - their largest rise in four
months - on speculation that it may increase its prices.
Last year Uralkali quit a trading alliance with Belarus
which controlled 40 percent of the $20 billion global market of
the crop nutrient. The move triggered a plunge in the price of
potash as the company focused on increasing sales after years of
a "price-over-volume" strategy. [ID:nL6N0G013H] [ID:nL6N0KN1NS]
The rise in Uralkali's share price on Wednesday was partly
caused by speculation that it may increase its price for
customers in Brazil and was supported by a large number of short
positions in its shares, the head of sales at a foreign bank
told Reuters.
Shares were also supported by the producer's ongoing
negotiations over its Chinese contract, which could set a price
floor, said Boris Krasnojenov, an analyst at Renaissance Capital
in Moscow.
The contract with China, the world's largest potash
consumer, is seen as a benchmark by the bulk of market
participants.
"There are rumours that Uralkali will sign the contract with
China for the first half of the season soon and that China could
agree on the price of $300 per tonne, which would mark the price
bottom," Krasnojenov said.
Uralkali declined to comment on its negotiations with
customers.
Uralkali shares were up 6.3 percent in Moscow by 1303 GMT at
178.1 roubles per share, the largest rise since Sept. 9, and
outperforming the broader Moscow index <.MCX> which rose 1
percent. Its global depository receipts were up 3.0
percent in London.
Confidence about higher potash prices also supported some
other producers. Germany's K+S was up 2.9 percent in
Frankfurt, while Israel Chemicals (ICL) rose 2.8
percent in Tel Aviv. Both outperformed their broader blue-chip
indexes, which were up 1.3 percent <.GDAXI> and 0.9 percent
<.TA25> respectively.
Uralkali is signalling that Brazilian buyers will have to
pay $350-360 per tonne on a cost-and-freight basis (CFR) for
granular potash for March volumes compared to the current $320
per tonne, JP Morgan said in a note.
JP Morgan said it had seen the first clear evidence of a
return to the price-over-volume strategy due to speculation that
Uralkali has joined a group called Canpotex, the world's top
export group, in pledging that prices below $300 per tonne in
Southeast Asia would not be supported.
Canpotex is owned by Potash Corp of Saskatchewan ,
Mosaic Co and Agrium Inc .
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