K+S says farmers replenishing fertiliser inventories
PHILIPPSTHAL, Germany, July 3
PHILIPPSTHAL, Germany, July 3 (Reuters) - Germany's K+S has seen potash prices stabilise as farmers refill inventories that were depleted when the collapse of one of the world's two big cartels for the fertiliser mineral plunged the sector into turmoil last year.
"We are even able to slightly increase prices in some markets," management board member Andreas Radmacher told journalists during a news conference at the group's Werra mine in the central German town of Philippsthal.
Russian producer Uralkali last year quit a powerful sales alliance with Belarus' Belaruskali, leading to higher output volumes and lower prices, and prompting farmers and potash import organisations across the globe to hold off on orders in anticipation of a further drop in prices.
Prices bottomed out earlier this year, helping first-quarter earnings at K+S beat market expectations, and Radmacher said demand now exceeded the company's supply.
"We could deliver a lot more if we had volumes available," said Radmacher, but K+S's production is stuck at about 7 million tonnes of potash per year until its expansion project in Canada known as Legacy comes online in 2016.
"That is our real dilemma," Radmacher said.
He affirmed an estimate for the global potash market to grow to about 60 million tonnes this year from 58.5 million last year.
K+S is also looking to expand its other main business, which makes salt, and could eventually make acquisitions there. But for the moment, Chief Executive Norbert Steiner said K+S would concentrate on starting potash production at Legacy in Canada.
K+S, the world's No.1 salt supplier and owner of the Morton Salt brand, aims to double annual operating profit from the salt business to more than 250 million euros ($341 million) by 2020.
Last year, the salt business generated an operating profit of 117.8 million euros, or about 18 percent of group profit.
($1 = 0.7331 Euros) (Reporting by Andreas Kroener; Writing by Maria Sheahan, editing by David Evans)