Stung by weak prices, potash miners look to specialty products
By Rod Nickel
WINNIPEG, Manitoba Nov 18 (Reuters) - Potash miners, facing another round of tough negotiations with big buyers in China and India, are looking to support sinking profits by boosting sales of higher-margin specialty products, according to top executives.
The pink fertilizer's price has fallen sharply this year, under pressure from bloated capacity, soft grain prices and weak currencies in Brazil and India, spurring Potash Corp of Saskatchewan, Mosaic Co and Belaruskali to slice output.
Miners face further pressure as they start talks in coming weeks with China's Sinofert Holdings Ltd for a 2016 supply contract, which generally sets a global price floor.
But with few expectations of a rebound soon, potash executives are looking beyond production cuts.
ICL Israel Chemicals Ltd plans to tap more profitable products, Chief Executive Stefan Borgas said in an interview.
The company will accelerate production of premium-priced polyhalite, a mineral with several nutrients, at its United Kingdom potash mine, he said. ICL is targeting production of 1 million tonnes of polyhalite, also called polysulphate, by 2020, up from its previous target of 600,000 tonnes.
"We are trying to accelerate this switch because polysulphate is so much more profitable than MOP (common muriate of potash)," Borgas said.
ICL is also redrawing plans to develop an Ethiopia deposit to first produce sulphate of potash (SOP), a premium potash suitable for fruits, instead of MOP. Continued...