K+S expects potash production capacity to increase by 10%-15% over 5 yrs
MOSCOW. Sept 12 (Interfax) - Germany's K+S expects production capacity for potash fertilizer to go up by 10%-15% over the next five years from its current level, the company's manager, Peter Helmut, said at the conference Mineral Fertilizers-2011.
He said that the bulk of the development to take place in Latin America, Brazil, Argentina and Belarus. Furthermore, China will develop its own production even though the country will be unable to cover its demand fully.
Helmut also expressed the opinion that EuroChem's project in the Volgograd region would not be launched in 2015-2016, adding that this project is very difficult because of the great depths were the potash layers are located.
Total fertilizer supply to world markets should hold this year at 2010's level, at around 58 million-59 million tonnes, Helmut said.
He also said that demand for potash fertilizer over the long-term would rise 3%-5% a year on average. The biggest growth in demand is expected in emerging markets such as Latin America and Asia where it could come to around 5%-8%. The capacity factor for the period until 2015 is forecast at 65%.
Helmut added that over 100 new potash projects have been announced in 25 countries, eight of which will be developed from scratch. The implementation of these projects will bring potash prices down, he said. However, he noted the risks that many of the announced projects would be delayed or called off. According to Helmut, the construction of 2 million tonnes in new capacity currently requires around 2.5 billion rubles. This proportion was somewhat different earlier at $1 billion per 1 million tonnes. Therefore, K+S is looking into the possibility of implementing a new project in Canada by employing the underground leaching method. "We hope that this will cost less," he said.
