Mosaic lowers Q3 price and volume guidance as market softens
TORONTO (miningweekly.com) – US fertiliser producer Mosaic on Monday said domestic and international crop nutrient markets have softened since July, in part as a result of the distributors' cautiousness caused by the Belarusian Potash Company (BPC) break-up, prompting the company to lower its third-quarter price and volume outlook for potash and phosphates.
In potash, the revised quarterly guidance range of 1.45-million to 1.65-million tonnes reflected lower near-term demand. The company's realised price expectations were now in the range of $330/t to $340/t, net of transportation and other distribution costs. The potash gross margin rate was now also expected to be in the low- to mid-30% range.
Mosaic said the distributors' cautious sentiment regarding potash was spilling over as buyers were in a ‘wait-and-see’ mode.
The company had lowered its third-quarter volume guidance to between 2.6-million and 2.8-million tonnes and expected realised prices to drop to between $430/t and $440/t, net of transportation and other distribution costs. The phosphates gross margin was expected to be in the mid-teens.
"The long-term positive outlook for crop nutrient demand has not changed; high commodity prices are driving record farm returns and making our products more affordable than ever before.
“These strong fundamentals are expected to drive near-record global phosphate and potash shipments in calendar 2013," president and CEO Jim Prokopanko said in a statement.
Further, the company now expected its effective tax rate for the seven-month transition period to be in the low-20% range.
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