TORONTO (miningweekly.com) – Spot potash prices at the Port of Vancouver climbed to $490/t in July and another $30/t to $40/t increase is likely before autumn in the Northern Hemisphere, Scotiabank said on Wednesday.
“With strong demand in most of Asia and Latin America, producers may aim for a spot potash price (granular grade) approaching $600 cost and freight by late 2011,” economics VP and commodity market specialist Patricia Mohr said in a report.
Canpotex, the cartel that markets Canada’s biggest potash producers’ output, said late in June that it had agreed a $70/t price increase with China for the second half of 2011, bumping up the price to $470/t.
Canada produces about one-third of the global supplies of the crop nutrient.
According to Mohr, spot Vancouver potash price have already gained $111/t, or 29%, since December.
India, one of the top two global potash users, has failed to reach a supply agreement with Canpotex this year, protesting that prices are too high and threatening to take a break from buying the mineral until prices ease.
The cartel’s members, Potash Corp, Agrium and Mosaic, have said that the country runs food supply risks by deciding not to apply the nutrient to its soils, which are often of poor quality.
Last week, Bloomberg quoted Mosaic CEO Jim Prokopanko as saying Canpotex’s “cupboard is bare” and that it would only resume talks with Indian buyers later in the third quarter.
Canpotex had previously said it was sold out for the third quarter, with large volumes already committed for the last three months of the year.
Also in the Scotiabank commodity price index report, Mohr showed that the metal and mineral index increased by 0.1% for June, compared with a 0.3% slide for the broader commodity index, mainly because of copper’s strong performance.
Spot gold prices hit a new $1 624.07 record on July 25 as debt default fears seesawed between the US and Europe, and Mohr said the metal would not lose its gleam anytime soon.
“Aside from gold, the Swiss franc appears to be the currency of choice, rising to an all-time high against the US dollar on July 25, and strengthening against the euro. Gold may maintain its allure for a while longer,” she commented.
Earlier on Wednesday, UBS bullion bank precious metals strategist Dr Edel Tully predicted the yellow metal could reach $1 800/oz before the year is through.
For Western Canada’s premium-grade coking coal sales into Asia, prices eased from a record high of $330/t at the Port of Vancouver by June, to $315/t.
This was still 40% higher than last year’s levels though.
“While premium coking coal prices will ease further in the third quarter, contract prices should average a still high $298 in 2011 and $250 in 2012, compared with $214.75 in 2010 and a peak $300 in 2008,” said Mohr.