In its recent earnings call, Uralklali highlighted its new strategy, called the Revenue Maximization Strategy.
The potash industry is pretty concentrated (as an oligopoly), with major producers holding on to the majority of market share.
The recent extradition of Uralkali’s chief executive back to Russia, who was originally put into jail for throwing a curve ball at Belaruskali, raises hopes that a partnership could reform.
Since 2007, motor gasoline consumption has fallen in the United States due to reasons like sluggish employment, fuel economy, and alternative fuels.
Natural gas is a major raw material input in the production of nitrogenous fertilizers, such as urea and ammonia, ranging from 40% to 70% of the cost of goods sold.
Analysts use retail urea prices to illustrate the supply and demand dynamics between farmers and retailers.
The latest proposal to scale back ethanol production would cut back ethanol requirements to about 13.0 billion gallons, a 600 million decline.
According to the China National Chemical Information Center, the average selling price of urea stood at 1,751.48 renminbi per metric tonne on November 22.
Of course, farmers aren’t happy about this. A cut in the ethanol mandate would lower corn demand, corn prices, and their profits.
Coal is one of the main inputs used in China to make nitrogenous fertilizer. Fluctuations in coal prices can have a significant impact on global prices.
This change would limit the amount of corn ethanol consumption from 14 billion gallons in 2014 to between 12.7 billion and 13.2 billion gallons.
Despite a recovery in 2014, investors should be warned about the longer-term outlook for the potash business.
Mosaic currently expects a recovery in potash demand from India and China by the end of 2014.
Mosaic Co. (MOS) doesn’t see price appreciation in its fertilizers over the short term, despite improving domestic demand.
Prices slipped lower over the past few months and quarters due to weak shipments into India and China.
In this series, we’ll explore Mosaic Co.’s latest discussions on its third quarter 2013 earnings results and the industry outlook.
Earnings for nitrogenous fertilizer producers have fallen by more than 30% for this last quarter compared to the same quarter a year ago.
Terra Nitrogen Company LP (TNH) sank 23% since the start of November and 30% from the average price since mid-2012.
Because of lower projected corn acreage, nitrogen use in 2014 is expected to be 13.3 million metric tonnes, slightly lower than this year.
As investors might have noticed, lower prices can drive expectation of lower prices and delay purchases, which negatively impacts demand.