Shares in German potash miner K+S fall 6 percent to a three-week
low at the bottom of German blue-chip index DAX due to a disappointing
outlook, traders say.
The company anticipates a drop in operating profit for a third year due to
lower potash prices, which are mainly caused by a breakup of a powerful sales
alliance between rivals Uralkali and Belaruskali last year.
UBS analysts see a risk to pricing from independent contract buyers.
"Belaruskali is clearly finding it tough to sell and market product in a
post-cartel world, and covering fixed costs with deep discounted contracts is
probably very attractive for them," UBS analysts write in a note.
This might come in handy for groups like Norwegian fertiliser producer Yara
and Russian PhosAgro, which are not bound by a contract but
free to go for the lowest bidder.
Bank of America Merrill Lynch analysts highlight that the guidance of
stagnating salt sales in 2014 also might be seen as moderately disappointing.
K+S is the world's largest salt supplier.
($1 = 0.7192 euros)
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