BPC, APC agree to supply potash to China at $400/tonne CFR

15 January 2013 12:59  [Source: ICIS news]

LONDON (ICIS)--Belarusian Potash Company (BPC) and Jordan’s Arab Potash Company (APC) have both signed agreements with Chinese importers to supply potash at $400/tonne (€300/tonne) CFR (cost & freight) in the first half of the year, the companies said on Tuesday.

BPC has agreed to supply up to 1m tonnes of potash to Sinochem and CNAMPGC over the period. The volumes include a firm quantity of 700,000 tonnes and optional tonnage of 300,000 tonnes.

APC has signed an agreement with Sinofert, but has not confirmed the volumes under the agreement.

A press release issued by APC said the shipment size is in line with the “traditional volumes in the same time period”. APC had supplied 250,000 tonnes in the first half of 2012 under its previous contract in China.

“New contracts with our Chinese partners are a positive signal for the global potash market setting the floor price and anticipating significant delivery volumes,” Oleg Petrov, director for sales and marketing at BPC parent company Uralkali said.

BPC is a joint venture trader of Russian potash major Uralkali and Belarus’ Belaruskali, and sells potash manufactured by the two companies.

The agreements in China have been signed at a $70/tonne discount to the previous price, but this comes as no surprise given the lack of demand in the market. 

Saskatchewan’s Canpotex was the first supplier to announce a deal in China, ending six months of deadlock with Chinese buyers. Canpotex will supply 1m tonnes of MOP to Sinofert at $400/tonne CFR.

BPC is now believed to be in discussions with Indian importers, and is expected to announce a fresh contract in the coming months.

“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,” Petrov said.

Chinese and Indian importers delayed signing potash contracts in 2012 as they were hoping to settle at lower prices.

($1 = €0.75)

By: Deepika Thapliyal
+44 208 652 3214

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