In late September, we discussed all the reasons to expect 2009 to be a thoroughly dim year for potash, the fertilizer that made PotashCorp
I said then that next year's prospects remained bright. Let's get up to speed on the latest developments to see if that holds true.
In early October, Belarusian Potash (BPC) gave a fairly grim assessment for 2010, pegging global shipments at 45 million metric tons. PotashCorp soon cut its own outlook to 50 million tons, down from 55 million to 60 million. None of this seemed to shake investors' confidence, perhaps thanks to takeover rumors swirling in the air. I hope you're not holding your breath for that BHP Billiton
In November, European potash leader K+S reported a miserable quarter, and mirrored BPC's call for 45 million tons of demand in 2010. The company also granted that potash prices could fall further in 2010. Analysts speculated that K+S would soon need to raise equity, having stretched its finances thin with the purchase of Morton Salt from Dow Chemical
In early December, Mosaic and PotashCorp executives kept the tone upbeat in their public comments. Mosaic's chief financial officer said he saw a more pronounced rebound in the phosphate market, but pointed to activity on the potash side as well. That's good, because November inventories were still 89% above their five-year average.
To really get the market moving, exporters needed a Chinese agreement on 2010 prices. Goldman Sachs
If other exporters like Canpotex, the Canadian group that includes PotashCorp and Agrium