Speculation that the world’s potash prices have reached a new floor has been circulating, and Germany’s K+S AG CEO told a German newspaper this week that he thinks the bottom has now been reached.
Handelsblatt daily quoted Norbert Steiner as saying in an interview, “The price of $400 per tonne will likely prove to be the floor.”
Steiner said prices dropped after months of declines has hurt other potash mining companies around the world. He also said that K+S’s larger rivals, such as Canpotex and Uralkali, had trouble getting China and India to sign contracts, which has depressed prices.
In December, Canpotex finally had China sign an agreement for potash, but it was at a steep discount of $400 per tonne. Steiner said potash miners were still getting prices of at least $465 per tonne in smaller Asian markets.
Canpotex signing a large deal at a deep discount has had repercussions on the prices K+S and other potash companies can charge even though K+S sells very little to China or India. Price cuts last year by the larger potash companies caused K+S to cut its 2012 profit outlook in November.