Uralkali first-half 2014 potassium chloride production up 33%

03 July 2014 11:19 Source:ICIS News

LONDON (ICIS)--Uralkali said on Thursday that its output of potassium chloride (KCI) potash production for the first half of the year was up 33% compared to the same period in 2013 at 6m tonnes, following the Russia-headquartered company’s decision to shift to a volume-based strategy.

Production levels were also up year on year for the second quarter, with output ramping up 29% to 3.1m tonnes following the company’s decision to break away from potash cartel Belarusian Potash Company (BPC), which it had run alongside producer Belaruskali.

The decision was taken as a result of the traditional price over volume strategy pursued by the potash market failing to produce strong returns in the face of subdued demand and oversupply, leading to low capacity utilisation and falling prices in the face of intensifying competition, according to CEO Dmitry Osipov.

The company’s net profit for 2013 fell by 58% year on year to $666m, which Uralkali chiefly attributed to those factors.

Potash prices have plummeted since the company – which stands as the world’s largest potash producer – broke away from BPC, and are likely to stick around the low $300s/tonne for the rest of 2014, according to Moody’s, which has endorsed Uralkali’s estimate of 56-58m tonnes of global potash demand during the year.

By Tom Brown