CORRECTED - UPDATE 2-Potash strike could nip some sales, boost prices
(Corrects spelling to Fertecon from Fenelon in 7th paragraph)
(Adds comments about prices from fertilizer consultant)
WINNIPEG, Manitoba, Aug 19 (Reuters) - A strike at three Canadian potash mines owned by Potash Corp of Saskatchewan (POT.TO) could affect shipments to industrial customers, which account for about 5 percent of the company's sales, a Potash Corp spokesman said on Tuesday.
But it is too early to tell how the strike by about 500 mine workers, members of the United Steelworkers union, will affect the mainstay fertilizer business of Potash Corp, the world's largest fertilizer company, spokesman Bill Johnson said in an interview.
"It's a little early in the strike to really assess what impact this will have on our commitments to customers," he said, declining to comment on whether there had been any impact on contractual commitments since workers walked off the job on Aug. 7.
The three Saskatchewan mines account for 30 percent of Potash Corp's production and about 6 percent of world capacity.
Potash producers have been unable to keep up with demand for the fertilizer as record crop prices give farmers the means and motivation to apply more potash to soil to boost yields -- even though prices for the mineral have soared.
A year ago, potash sold for under $200 per tonne, basis Vancouver, British Columbia. But the market surged to $700 per tonne by the end of July, according to data on Potash Corp's website, making potash worth more than $1,000 per tonne in international markets, including freight.
The strike comes during the off season for fertilizer, and has had no impact thus far on potash prices, Barrie Bain, director of respected fertilizer consultancy Fertecon Ltd, said in an e-mail.
But that could change if the strike lasts beyond mid September, when demand starts to pick up, Bain said.
"If the strike continues into October, we could then start to see a significant impact on prices," he said.
Potash is also used for industrial applications such as glass making, oil drilling, aluminum recovery, water softening, and to make potassium hydroxide used in soaps and batteries.
"We've got a small number of industrial customers and there's certainly a potential for their shipments to be impacted," Johnson said.
There have been no formal contract talks between the company and union since the strike began, and there were no talks scheduled as of on Tuesday, he said. The major issue in dispute is wages.
Potash Corp has said the union asked for a bonus based on commodity prices that would cost $157,000 per employee this year, but the Steelworkers have said that figure is overstated.
Shares of Potash Corp were up 3.30 percent at C$187.11 on the Toronto Stock Exchange on Tuesday afternoon. ($1=$1.06 Canadian) (Reporting by Roberta Rampton; Editing by Peter Galloway)
