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How Did These 8 Fertilizer Companies Perform in 3Q16?

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 10
How Did These 8 Fertilizer Companies Perform in 3Q16? PART 10 OF 11

Comparing 3Q16 Phosphate Prices of Major Producers

Ammonium phosphates

Ammonium phosphates are the most widely used phosphate fertilizers in the world. DAP (diammonium phosphate) is the most used among phosphate fertilizers, according to Mosaic Company (MOS), which is one of the largest producers (MXI) of phosphate fertilizers.

DAP prices have remained firm over the past few quarters. Let’s see how they performed in 3Q16 for some of the largest producers.

Comparing 3Q16 Phosphate Prices of Major Producers

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Average realized prices

Average realized phosphate prices fell 27% for the above three companies YoY (year-over-year) in 3Q16. The average realized prices for DAP were the lowest for PotashCorp during the quarter. In 3Q16, PotashCorp’s (POT) average selling price for potash fell 34% to $313 per metric ton compared to $475 per metric ton in 3Q15.

Mosaic’s average realized phosphate prices also fell year-over-year by as much as 28% to $326 per metric ton from $451 per metric ton in 3Q15. Agrium’s (AGU) average realized prices also fell 24% to $478 per metric ton from $629 per metric ton during the quarter.

Why prices fell

According to PotashCorp, phosphate prices fell as a result of weakness in demand and lower raw material costs year-over-year. According to Mosaic, an increase in availability from competition as well as softer demand from Indian customers put downward pressure on phosphate fertilizer prices during the quarter. Israel Chemicals (ICL) echoed similar reasons for weakness in phosphate prices.

Next, let’s discuss the phosphate segment’s gross margins.

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