How Producers’ Potash Segments Trended in 4Q17



Potash margins

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.

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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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