Potash Corp shares fall after price cut
By Rod Nickel
WINNIPEG, Manitoba (Reuters) - Shares in Potash Corp of Saskatchewan , the world's biggest producer of the fertilizer ingredient potash, fell sharply on Tuesday after the company announced a deep price cut.
The Canadian potash producer said on Monday it would cut its U.S. Midwest price to US$390 per tonne for the January 4-February 28 period from US$515 per tonne at present.
That followed news on Wednesday that major exporter BPC had agreed to sell more than 1 million tonnes of potash to China at US$350 per tonne.
"(Potash Corp's price cut) should have been expected," said analyst Edlain Rodriguez of New York-based Broadpoint Gleacher Inc. "They would adjust downward the prices essentially to reflect lower global prices."
Potash shares closed down 2.2 percent at C$114.50 on the Toronto Stock Exchange and 2 percent at US$109.50 in New York.
"It's a light (volume) day, not too many people are around, so I think (the drop) is exaggerated," Rodriguez said.
Given the small trading volumes after the Christmas holidays, the price cut could weigh on Potash Corp stock for the rest of the week, said analyst Terence Ortslan of T.S. Ortslan & Associates.
"Sometimes I'm surprised how much the expectations can get out of range," he said. "I think the price list was OK given the circumstances." Continued...