K+S CEO says potash prices have bottomed out -report
FRANKFURT Feb 5 (Reuters) - Germany's K+S AG expects that potash prices have bottomed out after months of declines hurt miners of the crop nutrient, its chief executive told a German newspaper.
"The price of $400 per tonne will likely prove to be the floor," Handelsblatt daily cited Norbert Steiner as saying in an interview published on Tuesday.
Prices fell last year due to drawn-out talks between K+S's larger rivals in Canada and Russia and importers China and India, which are among the world's biggest users and held off on purchasing.
In December, Canadian sales agency Canpotex, which supplies a third of the world's potash, agreed to a new supply contract with China at $400 per tonne, a deep discount.
"That means the period of weak demand from China has ended. India will likely sign new contracts soon," K+S's Steiner said.
He said potash miners were still getting prices of at least $465 per tonne in smaller Asian markets, which get less of a volume discount than China.
Even though K+S exports little to China and India and derives more than half of its potash revenue from Europe, the prices it can charge are affected by negotiations over bulk procurement in these countries. Last year's price declines forced K+S to cut its 2012 profit outlook in November.
Potash Corp of Saskatchewan last week forecast a modest rebound in earnings for 2013, with key importers in China and eventually India resuming potash purchases, though it warned that its recovery would be more gradual than expected. (Reporting by Maria Sheahan; editing by Jane Baird)