Strength in potash
Potash fertilizers (XLB) have shown strength so far this year, which was evident in the earnings of PotashCorp (POT), one of the largest producers of potash fertilizers globally. Potash prices have gained momentum this year as a result of strength in demand year-over-year. That’s expected to continue into 2018 as well, with PotashCorp’s management expecting global demand to be at record levels of 63.0 million–67.0 million metric tons in 2018.
PotashCorp alone will see a ~6.0% growth in shipments year-over-year in 2018. Now let’s look at potash price movements last week.
For the week ended October 27, 2017, weekly movements in potash prices at the three locations in the above chart were broadly flat to positive. Granular urea in the Cornbelt saw prices move sideways to $231 per metric ton from a week ago. The prices there were ~3.0% higher year-0ver-year.
Similarly, granular potash prices in Brazil were broadly flat last week at $276 per metric ton, making it the third consecutive week of flat movements. However, in Brazil, potash prices were ~17.0% higher than the corresponding week a year ago in 2016.
For the standard grade of potash in Southeast Asia, prices rose last week 39 basis points to $255 per metric ton, from $254 per metric ton a week ago.
Next, let’s take a look at the affordability for fertilizers last week.