PotashCorp to temporarily shut two mines because of weak demand

09 December 2011 13:13  [Source: ICIS news]

LONDON (ICIS)--Potash Corporation of Saskatchewan (PotashCorp) will temporarily shut down two of its mines in Canada because of a lack of demand, the company said on Friday.

The move is “consistent with PotashCorp’s practice of matching supply with demand”, a statement issued by the company said.

The Lanigan mine will be closed for eight weeks, starting 8 January 2012, and will re-open on March 3 2012. The Rocanville mine will be shut for six weeks, from 25 December 2011 to 4 February 2012.

Production capacity at Lanigan is 3.6m tonnes/year, and at Rocanville is at 2.8m tonnes/year.

The shutdowns is an indication that demand in the region has failed to pick up as expected. Buyers have been cautious because of the global economic situation and they also believe the price of potash is high.

In mid-November, PotashCorp reduced its upriver terminal prices by around $20/short ton, from $590/short ton FOB (free on board) Nola in a bid to stir up demand. However, market activity has remained weak.

The company recently settled a legal dispute with Mosaic over a tolling arrangement under which Mosaic supplies potash to PotashCorp from a Canadian mine. PotashCorp said under the settlement Mosaic will deliver the balance of the potash tonnes owed to PotashCorp for the 2011 and 2012 calendar years. 

By: Deepika Thapliyal
+44 208 652 3214

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