Why Potash Prices Slid in the Week Ended July 8
In the final part of this series, we will discuss potash prices, which have been battered over the year. Potash companies such as PotashCorp (POT), The Mosaic Company (MOS), Agrium (AGU), and Intrepid Potash (IPI) have been negatively impacted by falling potash prices so far this year. Let’s see how potash prices traded last week.
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Prices were unchanged
For the week ended July 8, 2016, average MOP prices at Vancouver stood at $256 per metric ton, down from an average of $262 per metric ton in the previous week. Similarly, the price of granular MOP in Brazil inched down to $214 per metric ton for the week ended July 8, 2016, compared to $216 per metric ton in the previous week.
On the other hand, the price for standard MOP in Southeast Asia inched up to $242 per metric ton from $239 per metric ton in the previous week.
MOP prices in the Cornbelt remained subdued at $203 per metric ton ($224 per short ton) compared to the previous week.
MOP prices YoY
MOP prices in Vancouver fell by 17% YoY (year-over-year) compared to an average of $307 per metric ton last year. MOP in Brazil fell by 35.7% YoY from $333 per metric ton. In Southeast Asia, standard MOP prices fell by 24% from $321 per metric ton YoY. In the Cornbelt, MOP prices fell by 36.5% from $320 per metric ton YoY.
These downward price movements show that the market for potash producers such as PotashCorp, Mosaic, Intrepid Potash, and Agrium remains challenging. You can gain exposure to materials companies through the iShares Global Materials ETF (MXI), which invests about 4.5% of its portfolio in agricultural chemicals, including Dow Chemical (DOW) and DuPont (DD).
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