Potash Corp. shares surge on possibility of market thaw – by Ian McGugan (Globe and Mail – June 24, 2016)


Shares of Potash Corp. of Saskatchewan Inc. are surging on speculation the company’s rivals in Belarus and Russia may once again team up – a development that could potentially mark an end to potash’s long swoon.

Prices for the crop nutrient have plunged since the heady days of 2010, when BHP Billiton Ltd., the world’s largest miner, attempted to acquire Potash Corp. during the frenzy of the commodity supercycle.

One key factor in the protracted slide was the split-up in 2013 of the marketing alliance between state-owned Belaruskali of Belarus and Uralkali of Russia, which had previously helped to support global prices for potash.

Comments by Belarus President Alexander Lukashenko on Thursday fuelled speculation that the two large fertilizer producers may be open to renewing their partnership. “New Uralkali shareholders are coming to me every month saying, ‘Accept us,’” Mr. Lukashenko told Reuters. “We are not against it. Let’s unite, on our conditions.”

But his comments were played down by several analysts. “We believe Lukashenko was responding generally to a question about the possibility and stated he wouldn’t be against ‘on our conditions,’” Joel Jackson of Bank of Montreal wrote in a note. “Well, what’s new about that? [The alliance] broke up in mid-2013 because they disagreed on ‘conditions.’”

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