Ukrainian sales surged in the first half of the year

Market warms up in export volume

Ural Potash Corp’s export report for the first half of the year stated that export volume in January-June had reached 5.1 million tons, an increase of 55% compared with 3.3 million tons in the same period last year. At present, Ural Potash has a global market share of 23%, compared with 17% in the same period last year. The total sales volume is 6.1 million tons, which is a significant increase compared with 4.3 million tons last year, of which the domestic sales volume is 1 million tons, and the remaining part is the export sales volume.

"Overall, we saw considerable sales in the first half of the year," said Oleg Petrov, head of marketing for Ural Potash Marketing. "After a drop in potash prices, there is a pick-up trend now. The rebuilding of market confidence is very important, and the current price of potash fertilizer is at a low point, which will help boost purchasing power. At the same time, low potash fertilizer prices are also conducive to limiting the expansion of some projects and avoiding an increase in the excess market.” Ural Potash After changing the direction of development in June of last year, the expansion of market share and the increase in demand are the strong guarantees for the current increase in sales. In the first half of 2014, the global trade volume of potash fertilizer reached 33 million tons, and it is expected to have a demand of 25 to 26 million tons in the second half of the year. Oleg Petrov said that by 2015 global potash fertilizer demand will reach 60 million tons.

Prices fall more than swiftly

One very strange phenomenon is that, even if the first half of the year, whether the volume of shipments or sales of Wu Kung rose, the net profit is declining. In the same period last year, it was 397 million U.S. dollars, and this year it was 370 million U.S. dollars, a decrease of 7%. Pre-tax profit fell by 12% from last year's $876 million to $760 million this year. Overall revenue rose by 7.4% to 1.73 billion U.S. dollars. The reason for the drop in net profit was that potash price dropped by 30% compared with last year, and the price was 316 US$/ton in the same period of last year. The current price was 220 US$/ton, and the domestic price of potassium fell from 257 US$/ton last year to 156 now. USD/ton.

Ural potash production capacity has increased from 4.5 million tons last year to the current 6 million tons. Ukrainian potassium indicates that the current operating rate has reached 90%, and cash costs have dropped by 12% to 51 US dollars/ton. The decline in cash costs is due to high operating rates, cost reductions and currency devaluations.

Ural Potash said that although the price of potash has experienced a dramatic ups and downs like a roller coaster, from the current tight supply situation, both the demand and the price are slowly picking up. For large grain products, traders indicated that the sources of reserves in the third quarter have all been sold out. Ukrainian-KP forecasts that sales in 2014 will reach 11.5 million tons, while the global trade volume will be 58 million tons. China's consumption will reach 12 million tons, which is the largest consumption in recent years. In 2014, Wuka is expected to provide 2 million tons of potash fertilizer to China, of which 1.3 million tons will be transported by rail and 700,000 tons will be transported through the port.

The new project will be launched soon

Ural Potash also tracked the progress of new projects, including the development of a potash named Ust-Yayvinsky. The mining work at this destination will be completed next year. Another million-ton project will be completed in 2016. The annual production capacity is expected to reach 3.5-4.5 million tons. The Ukrainian-Kali spokeswoman stated that the future potential of the project is annual production of 7.5 million tons.

Ukrainian said that the current mining of potassium is still the main task. On the basis of existing projects, the search for potash resources is very necessary in the long run. Ural Potash stated that the newly developed iron ore license has been issued and the estimated reserves are 385 million tons. In addition, Ukrainian also acquired a 25% stake in Equiplan Participacoes, controlled the Antonina port terminal in Brazil, and enhanced its logistics capabilities in South America.