BPC to supply 1.3 mln tonnes of potash to China not including options
MOSCOW. July 27 (Interfax) - Belarusian Potash Company (BPC) has reached agreements on supply of 1.3 million tonnes of potash to China in 2016 not including options, BPC, the trading company for Belaruskali, told Interfax.
"In accordance with the agreements that have currently been reached, BPC plans to supply 1.3 million tonnes to China in 2016 under contracts," BPC said.
The firm volumes under the contract are fairly large, which is partially due to seasonal growth in demand in China in the second half, Raiffeisenbank analysts Konstantine Yuminov said. "The volumes are fairly large. BPC was the biggest supplier to the Chinese market in 2015: it supplied 2.6 million tonnes of potash to the Chinese market in the year as a whole, including 1 million tonnes in the first half of the year. The second half of the year normally accounts for the bulk of deliveries in connection with seasonal growth in demand," he said.
Russian Uralkali supplied 2.2 million tonnes to China in 2015, including 1 million tonnes in the first half.
In the middle of July, BPC reached agreement with a consortium of Chinese buyers (Sinochem, CNAMPGC, CNOOC) establishing the contract price on potash deliveries this year at $219 per tonne.
BPC was the first to reach agreement on long-term contracts with China and India. The contract price for China fell 30% compared with last year, to its lowest level since 2005, although analysts said the price was still higher than expected. The Chinese buyers, having amassed large potash inventories, had tried to get the price down to about $180 per tonne. The market was expecting a price of $200-$210 per tonne.
BPC has not disclosed the firm volumes under last year's contract with China. Including options, the company planned to deliver 1.7 million tonnes of potash to China.
Israeli ICL reported the day before that it signed several contracts to supply 700,000 tonnes of potash to China over the course of 2016.
Uralkali, as well as North American potash trader Canpotex, have yet to sign contracts with China or with another big potash importer, India.
Uralkali ships potash to China by rail. Company management previously said the shipments did not exceed 500,000 tonnes in the first half.
China is the world's leading importer of potash. It consumes 14 million-15 million tonnes a year - 25% of the global market - of which imports account for half.
