Russia's Uralkali sees room for potash price increase

Fri Jun 14, 2013 9:17am EDT
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* Says new projects need potash price of over $600/T

* Says believes in the efficiency of BPC trader

* Says global demand to reach 60 mln tonnes by 2015-2016

By Victoria Andreeva and Polina Devitt

MOSCOW, June 14 (Reuters) - Russia's Uralkali, the world's largest potash miner by output, sees room for global fertiliser prices to rise without attracting new competitors into the market, its head of sales said.

Potential new rival BHP Billiton is mulling whether to develop the 8 million tonne per year Jansen mine in western Canada, which would become the world's largest potash mine.

The few established producers in the market are holding potash prices at $450-$500 per tonne, however, around three times production costs but still low enough to act as a barrier to new entrants, Uralkali's Oleg Petrov said in an interview.

Potential newcomers see an opportunity in a rising demand for chemical fertilizers to feed a growing and increasingly affluent global population.

But at current prices an investor cannot be sure that greenfield projects can turn a profit, Petrov said. "To start new production, potash prices should be more than $500 per tonne at the mine gate and about $600 per tonne on the market."   Continued...