HOUSTON (ICIS)--Fertilizer producer Intrepid Potash on Thursday announced it had sold in the Q1 2014 period 31% more potash fertilizer year-on-year as demand and buyer confidence has turned more positive to start the year.
Speaking during an earnings conference call, company officials said a total of 242,000 tons of potash were sold in the first quarter and that looking ahead, the producer is confident that it will see strong second-quarter sales volumes.
“Potash demand was strong in the first quarter. Buyers' overall confidence turned positive as a result of the announced price increases and the settlement of the contracts in China and India. In response, our customers made purchases in advance of the spring season,” said Kelvin Feist, Intrepid vice president of sales and marketing.
“Our average net realized price for potash was $317 per ton in the first quarter. While this is down 6% sequentially from the fourth quarter, potash prices have stabilized in the last couple of months. We expect to gain a few more dollars per ton on our average net realized sales price for potash in the second quarter as the broader domestic market adjusts to the previously announced reference price.”
Feist said the company has benefitted from its logistic strategy, which was essential potash sales and price performance in the quarter as Intrepid deliverrf products from its facilities via truck to customers located near plants and had positioned product as far forward in the chain as possible last quarter.
“I think we've got a geographical footprint that we're very comfortable with today, and that just allows us to sell all the tons that we produce at a very good margin. So I would say that today, we're not changing our distribution patterns as a result of what may come in the future,” Feist said.
He said as the company looks ahead to the second half of the year, it is confident the continued movement of the product by global producers will be important for maintaining price momentum and supply dynamics in the market. He added that the biggest piece of the puzzle is amount of demand that is forthcoming from the international market.
“I think we've seen some of that through some of the contracts in India and China and most recently, in Southeast Asia. I guess that needs to continue to enable the supply-demand to be balanced. I would say, closer to home domestically, we see a pretty firm outlook,” Feist said.