Reuters reported that Sinochem has extended an agreement to buy potash from Canpotex, North America’s potash marketing arm, by one year. The publication writes that this could set the stage for the company to negotiate on the global floor price for the ailing potash market.
According to Reuters:
Sinochem said that Canpotex – owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc – would supply the greater of 1 million tonnes of potash, or a third of China’s seaborne potash imports in 2014. Under the agreement, Canpotex will continue to sell potash in China exclusively to Sinochem.
BMO Nesbitt Burns analyst Joel Jackson said:
Really, Canpotex’s market in China hasn’t really grown in the last few years. It would seem that they’re keeping their options open over the mid term.