Due to the increase in potash prices this year, the overall potash segment margins for the five companies discussed below expanded as much as 9% to 29% from 20% on average. Let’s look at the margin change that each company (XLB) saw.
Margins by company
In 4Q17, Israel Chemicals’ (ICL) potash segment margins expanded to 49% from 23% in 4Q16. Over the same period, PotashCorp’s (POT) (NTR) margins expanded 11% to 46% from 34% a year ago. Agrium’s (AGU) margins expanded from 20% to 29% year-over-year, while Mosaic Company (MOS) saw its margins expand from 16% to 23% from 16% a year ago. Higher selling prices primarily led to an increase in the margins for these companies.
Interestingly, Intrepid Potash (IPI), which experienced a gross deficit of 17% in the corresponding quarter a year ago, saw its margins expand to 3% in 4Q17.
Potash prices rose as a result of tighter potash supply globally, and the demand for potash remained supportive to alleviate the prices and margins for potash segments of the above companies.
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