uploads///Potash Segments Average Selling Prices

PotashCorp: Effects of Falling Potash Prices

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Dec. 4 2020, Updated 10:50 a.m. ET

Potash selling prices

Earlier in this series, we saw that shipments for PotashCorp’s (POT) Potash segment rose 27.0% year-over-year in 4Q16. However, this surge failed to offset the negative movements in potash prices. There was a 17.0% fall in sales, excluding freight costs.

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Prices impact sales

PotashCorp’s average potash selling price fell ~34.0% to $157 per ton in 4Q16, from $238 per ton in 4Q15. Potash prices in North America fell ~35.0% to $176 per ton year-over-year, from $271 per ton in 4Q15.

Similarly, potash prices in the offshore market fell ~34.0% to $148 per ton, from $226 per ton.

Potash prices for 2016

For 2016, overall average potash selling prices fell 40.0% to $158 per ton, from $263 per ton in 2015. Prices in North America fell 45.0% to $175 per ton, from $318 per ton in 2015. In the offshore market, prices per ton fell 39.0% to $148 per ton, from $241 per ton in 2015.

Since the offshore market makes up about two-thirds of the Potash segment’s sales, the more gradual fall in the offshore market softened the impact of a much steeper fall in the North American market.

You can keep track of fertilizer prices weekly on our website. The latest report is Fertilizer Stocks: Good Growth for the Week Ending January 20.

Falling potash prices (MOO) remain a concern for PotashCorp, Mosaic (MOS), Agrium (AGU), and Israel Chemicals (ICL). PotashCorp is expanding its low-cost Rocanville project to counter falling potash prices and preserve margins. We’ll be looking at margins later in this series.

In the next part, we’ll take a look at shipment growth for PotashCorp’s Nitrogen segment.

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