Big drop on POT after earnings - who wants $30 POT?
Potash makers plunge after Uralkali ends pact with Belaruskali
Shares of potash makers are tumbling after Russian potash producer Uralkali ended its cooperation with Belarus' Belaruskali. Uralkali now expects its potash output to jump to 13M tons in 2014 from 10.5M tons this year, Uralkali CEO Vladislav Baumgertner stated, according to Bloomberg. WHAT'S NEW: Uralkali, which had previously exported potash in cooperation with Belaruskali, now intends to export the fertilizer on its own. The change was made because Belaruskali began delivering potash independently, Uralkali stated. ANALYST REACTION: In a note to investors, Goldman Sachs wrote that Uralkali's decision should cause a "significant swift decline" in potash prices. Specifically potash prices are likely to sink to $300 per share, wrote the firm, which had previously expected the fertilizer to sell for $486 per ton in the second half of this year and $520 per ton in 2014. On the other hand, lower prices might trigger higher demand for potash, the firm stated. Investors are likely to react to today's news by swiftly selling shares of potash producers, BMO Capital analyst Joel Jackson wrote. He identified Potash (POT), Mosaic (MOS), Agrium (AGU), Compass Minerals (CMP), Intrepid Potash (IPI), and Sociedad Quimica (SQM) as stocks that investors are likely to exit. Potash prices could fall by $100 per ton, estimated Jackson. TODAY'S PRICE ACTION: In late morning trading, Potash (POT) tumbled 20% to $30, Mosaic (MOS) plunged 21% to $41.75, Agrium (AGU) dropped 5% to $86.90, and Intrepid Potash (IPI) plummeted 29% to $13.75.
Potash makers plunge after Uralkali ends pact with Belaruskali
Shares of potash makers are tumbling after Russian potash producer Uralkali ended its cooperation with Belarus' Belaruskali. Uralkali now expects its potash output to jump to 13M tons in 2014 from 10.5M tons this year, Uralkali CEO Vladislav Baumgertner stated, according to Bloomberg. WHAT'S NEW: Uralkali, which had previously exported potash in cooperation with Belaruskali, now intends to export the fertilizer on its own. The change was made because Belaruskali began delivering potash independently, Uralkali stated. ANALYST REACTION: In a note to investors, Goldman Sachs wrote that Uralkali's decision should cause a "significant swift decline" in potash prices. Specifically potash prices are likely to sink to $300 per share, wrote the firm, which had previously expected the fertilizer to sell for $486 per ton in the second half of this year and $520 per ton in 2014. On the other hand, lower prices might trigger higher demand for potash, the firm stated. Investors are likely to react to today's news by swiftly selling shares of potash producers, BMO Capital analyst Joel Jackson wrote. He identified Potash (POT), Mosaic (MOS), Agrium (AGU), Compass Minerals (CMP), Intrepid Potash (IPI), and Sociedad Quimica (SQM) as stocks that investors are likely to exit. Potash prices could fall by $100 per ton, estimated Jackson. TODAY'S PRICE ACTION: In late morning trading, Potash (POT) tumbled 20% to $30, Mosaic (MOS) plunged 21% to $41.75, Agrium (AGU) dropped 5% to $86.90, and Intrepid Potash (IPI) plummeted 29% to $13.75.
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