Analyzing Potash Prices after Mosaic Idled Its Plant
In the final part of this series, we’ll discuss potash prices. They have been battered over the year. Potash companies such as PotashCorp (POT), The Mosaic Company (MOS), Agrium (AGU), and Intrepid Potash (IPI) have all been negatively impacted by falling potash prices so far this year. Last week, Mosaic announced that it would idle its Colonsay potash plant. It had a capacity of 2.6 million tons. Read Mosaic to Idle Colonsay Mine: What Does That Mean? to learn more. Let’s see how potash prices traded last week.
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Prices were mixed
For the week ending July 15, 2016, average MOP (muriate of potash) prices at Vancouver stood at $256 per metric ton—unchanged from the previous week. Similarly, prices for standard MOP in Southeast Asia moved sideways to $242 per metric ton the previous week.
On the other hand, the price of granular MOP in Brazil rose to $215 per metric ton for the week ending July 15, 2016—compared to $214 per metric ton in the previous week.
MOP prices in the Corn Belt declined to $199 per metric ton ($220 per short ton)—compared to $203 per metric ton in 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% YoY from $331 per metric ton. In Southeast Asia, standard MOP prices fell by 24% from $319 per metric ton YoY. In the Corn Belt, MOP prices fell by 35.5% from $314 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). MXI invests about 4.5% of its portfolio in agricultural chemicals including Dow Chemical (DOW) and DuPont (DD).
To learn more about agricultural fertilizer companies, visit Market Realist’s Agricultural Fertilizers page.