June 20, 2012
India''s phosphate imports beat expectations
India had purchased more than 500,000-700,000 tonnes as revealed by North American exporters, according to PhosAgro.
India had in fact signed a "one million-tonne contract" at the start of the month, the Russian fertiliser group said.
And "contracts for over two million tonnes have been signed since then", PhosAgro said.
The company declined to reveal further information on the contracts, although www.cnchemicals.com has learned separately of talk of India buying significant volumes too from China and Saudi Arabia''s Ma''aden.
Such purchases will ease a major concern over the announcement by North America''s PhosChem consortium at the start of the month of a 500,000-700,000-tonne deal - that it was short on quantity, if firm on price, at US$580 a tonne.
"Indian demand is recovering," PhosAgro said, adding that, with deals with much-watched Indian buyers sealed, it "does not expect any serious slowdowns" in the phosphate market.
Furthermore, demand from Brazil, Europe, Russia and the US was "strong", and with demand due to pick up soon in many markets ahead of the next autumn sowing period.
"The market will remain stable, especially considering recent development with Indian contracts," Maxim Volkov, the PhosAgro chief executive, said.
A "challenging" Indian market had been one of the main setbacks to the phosphate market in the January-to-March quarter, the group said.
The group, which prides itself on the flexibility of its production operations, side-stepped some of the weakness in phosphates by switching production to NPK, the compound, nitrogen, phosphate and potash fertiliser.
That helped phosphate revenues, including NPK, rise 9% to RUB23.0 billion (US$0.71 billion).
However, with spending on raw materials such as sulphur rising, and production in the group''s nitrogen operations curtailed by factory refurbishment, group operating profits eased 1.7% to RUB7.53 billion (US$0.23 billion).
While earnings rose 24% to RUB9.74 billion (US$0.30 billion), this included a RUB1.8 billion (US$0.06 billion) gain on currency hedges, and an RUB800 million financing benefit.
PhosAgro depositary receipts, a proxy for shares, finished 2.1% lower at US$10.15 in London.
The group made no further comment on its withdrawal last week from the tender for the Russian government''s 20% stake in Appatit, the phosphate rock producer which PhosAgro already controls.
PhosAgro last week blamed its decision, which has forced the postponement of the sale, on "the fact that the tender organiser, BNP Paribas, has not disclosed or clarified several significant conditions of the tender".