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MOSAIC REDUCES POTASH PRODUCTION AT ITS SASKATCHEWAN MINE, CITES LESS DEMAND
Dec. 9, 2022
By David Marino and Elizabeth Elkin, Reuters
Mosaic Co. has temporarily curtailed potash production at its mine in Saskatchewan after weaker demand sent fertilizer prices sliding across North America.
The Colonsay site had been operating at 1.3 million tonnes per year, with plans to expand to as much as 2 million tonnes by the end of next year, the company said in a statement. It was restarted in August 2021 after being idled for two years due to slumping demand.
Fertilizer prices have slumped after spiking to record levels after Russia's invasion of Ukraine. Farmers from Brazil to Canada have eased back on buying, in some cases choosing to skip a year of potash application or to use less fertilizer in the face of high prices. That's left a glut on the market, with some cargoes being redirected to the US from Brazil.
"With demand returning slower than expected in the second half of 2022, Mosaic's inventory levels are sufficient to meet near-term demand," the statement showed. Underground development work will continue in anticipation of the restart of both mills in early 2023, the company said.
Potash in Brazil has fallen by more than half since hitting a high of over $1,200 per metric ton earlier this year, according to Bloomberg's fertilizer publication Green Markets. The latest weekly prices fell nearly 3% on Nov. 2 to $515 per metric ton.
Still, Mosaic and fellow fertilizer producer Nutrien Ltd. see a strong market ahead. Last week, Nutrien Chief Executive Officer Ken Seitz warned of looming shortages in coming years, with supplies from Russia and Belarus constrained. Nutrien plans to ramp up its capacity 40% by 2025.
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