July 7, 2011 / 7:53 AM / 8 years ago

UPDATE 1-Israel Chem signs potash deals with China

* To sell 500,000 tonnes of potash to China in H2

* Price similar to price paid to other potash firms

(Adds details, background, share rise)

TEL AVIV, July 7 (Reuters) - Israel Chemicals (ICL) said on Thursday it signed deals to supply Chinese customers with 500,000 tonnes of potash during the second half of 2011, following 500,000 tonnes sold in the first half.

ICL said its price is similar to recent prices recorded by other potash suppliers in the market and is about $70 a tonne higher than selling prices to China in the first half of 2011.

Potash export consortium Canpotex said in late June it will supply China with 630,000 tonnes of the crop nutrient in the second half of 2011 and indicated the price on the new contract rose about 17.5 percent over previous contract levels to about $470 a tonne.

The Canpotex deal followed an announcement by Belarusian Potash Co that it had agreed to sell a minimum of 500,000 tonnes to China with options to sell another 200,000 tonnes at $470 a tonne on a cost-and-freight basis.

ICL, which is controlled by Israel Corp , is the world’s sixth-largest producer of potash.

The number of ICL’s Chinese customers has increased since 2010 and it sells its potash directly to Chinese fertiliser producers and distributors, the company said.

ICL’s primary source of potash is the Dead Sea, which is in closer proximity to Asian markets than most potash producers.

Its shares were up 1.4 percent to 56.15 shekels in morning trade, outpacing gains in the broader Tel Aviv market. ($1 = 3.4 shekels) (Reporting by Tova Cohen; Editing by Jon Loades-Carter)

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