New potash contract with China $400 per tonne
MOSCOW--Belarussian Potash Co., the trading arm for Belaruskali and Russian potash producer Uralkali (URKA.RS) agreed Monday with top Chinese importers Sinochem International Corp. (600500.SH) and CNAMPGC to a contact for 1 million metric tons of potassium chloride for $400 a ton for the first half of 2013.
The contract calls for a firm commitment of 700,000 metric tons with a option for an additional 300,000 metric tons, BPC said.
"New contracts with our Chinese partners are a positive signal for the global potash market setting the floor price and anticipating significant delivery volumes. We are confident that these contracts will act as a stimulus demand in other regions and provide the basis for overall growth of the potash market in 2013," said Oleg Petrov, Uralkali's director for sales and marketing.
Last week, Uralkali said it had set the price for Russian fertilizer producers for the first quarter at 10,252 rubles ($332) per ton. In December, Uralkali said it would cut its production capacity to 50% in the first quarter due to lessening demand. Analysts said the fall-off in Uralkali sales was largely driven by the delay in signing a contract with China and with India. A deal with India remains unresolved.
The agreement comes just weeks after Canpotex, which trades potash produced by Potash Corp. of Saskatchewan Inc. ( POT ), Mosaic Co. ( MOS ) and Agrium Inc. ( AGU ), announced a deal to sell 1 million tons to Sinofert Holdings Ltd. (0297.HK) at $400 a ton for the first half.
Over the weekend, Arab Potash Co. (APOT.AJ) said it had reached a deal with Sinofert for the first half that was "in line with the terms agreed with other suppliers."