15th Aug 2012, by Agrimoney
Ideas of a revival in potash demand, spurred on Tuesday by results from K+S, received a further fillip when Israel Chemicals unveiled forecast-beating profits, and sector leader PotashCorp flagged a drop in inventories of the nutrient.
Israel Chemicals, known as ICL, said that while demand for potash in the April-to-June period proved "low" - undermined by delays in orders by India, where the weak rupee has curbed the affordability of imports - it showed "an improvement compared to the first quarter of the year".
The group's core potash division raised sales volumes by 11.8% to more than 1.5m tonnes, lifted by demand from China and Brazil, where demand for the nutrient was "high", lifted in part by record sowings of second-crop, or safrinha, corn which is sown as a follow-on crop to soybeans.
The comments echo those of German-based K+S which saw strong sales to South America and Asia mean that European takings, unusually, accounted for less than half of group revenues in the first six months of 2012.
'Impressive results'
ICL's earnings, while 4.4% down at $407.3m for the latest quarter, a decline reflecting largely higher financing expenses, were some $2m above analysts' expectations.
Revenues, up 27% at $1.96bn, narrowly beat market forecasts too, the group, the sixth-ranked potash producer, said.
And ICL was upbeat over its outlook, saying that "deliveries of the balance of the sales contracts with China and India, and the continued strong demand in Brazil, are expected to positive influence the [July-to-September] quarter of 2012".
Credit Suisse analysts said that ICL had "demonstrated impressive recovery from the trough in the first quarter of this year.
"Potash production and sales reached historical high levels… even surpassing 2008 levels," the bank added, restating an "outperform" rating on ICL shares, with a price target of 56.30 shekels.
The stock gained 2.5% to 47.35 shekels in Tel Aviv on Wednesday.
Inventory slump
Separately, Canada-based PotashCorp, the world's top potash group by capacity, revealed a tumble of 462,520 tonnes, to a little over 2.5m tonnes, last month in inventories of the nutrient held by North American producers.
The decline, while still leaving inventories some 500,000 tonnes above average levels, follows continued assertions by North American potash producers, such as PotashCorp, of recovering demand.
Potash prices, as measured in the key port of Vancouver, remained stable at a little under $500 a tonne, PotashCorp data showed.
Ideas of a revival in potash demand, spurred on Tuesday by results from K+S, received a further fillip when Israel Chemicals unveiled forecast-beating profits, and sector leader PotashCorp flagged a drop in inventories of the nutrient.
Israel Chemicals, known as ICL, said that while demand for potash in the April-to-June period proved "low" - undermined by delays in orders by India, where the weak rupee has curbed the affordability of imports - it showed "an improvement compared to the first quarter of the year".
The group's core potash division raised sales volumes by 11.8% to more than 1.5m tonnes, lifted by demand from China and Brazil, where demand for the nutrient was "high", lifted in part by record sowings of second-crop, or safrinha, corn which is sown as a follow-on crop to soybeans.
The comments echo those of German-based K+S which saw strong sales to South America and Asia mean that European takings, unusually, accounted for less than half of group revenues in the first six months of 2012.
'Impressive results'
ICL's earnings, while 4.4% down at $407.3m for the latest quarter, a decline reflecting largely higher financing expenses, were some $2m above analysts' expectations.
Revenues, up 27% at $1.96bn, narrowly beat market forecasts too, the group, the sixth-ranked potash producer, said.
And ICL was upbeat over its outlook, saying that "deliveries of the balance of the sales contracts with China and India, and the continued strong demand in Brazil, are expected to positive influence the [July-to-September] quarter of 2012".
Credit Suisse analysts said that ICL had "demonstrated impressive recovery from the trough in the first quarter of this year.
"Potash production and sales reached historical high levels… even surpassing 2008 levels," the bank added, restating an "outperform" rating on ICL shares, with a price target of 56.30 shekels.
The stock gained 2.5% to 47.35 shekels in Tel Aviv on Wednesday.
Inventory slump
Separately, Canada-based PotashCorp, the world's top potash group by capacity, revealed a tumble of 462,520 tonnes, to a little over 2.5m tonnes, last month in inventories of the nutrient held by North American producers.
The decline, while still leaving inventories some 500,000 tonnes above average levels, follows continued assertions by North American potash producers, such as PotashCorp, of recovering demand.
Potash prices, as measured in the key port of Vancouver, remained stable at a little under $500 a tonne, PotashCorp data showed.
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