The share price of Israel Chemicals Ltd. (TASE: ICL) fell 17% in heavy trading this afternoon, after Russian potash producer Uralkali JSE (LSE: URKA) broke away from the Potash producers cartel and began negotiating its own deals. Uralkali predicts that potash prices will fall below $300 per ton. The most recent potash contracts were for $405 per ton.
Uralkali quit the Belarusian Potash Company (BPC) potash cartel, and is now in contact with India and Brazil on new potash contracts. This development is liable to put heavy pressure on potash prices, and therefore on Israel Chemicals.
Israel Chemicals will publish its financials for the second quarter on August 7. The company posted a profit of $305 million on $1.64 billion revenue for the first quarter. It closed its last potash contracts at $413 per ton. Potash and phosphates accounted for 58% of the company's sales in the first quarter.
A recent review of Israel Chemicals by UBS analyst Roni Biron predicts that the company will report earnings per share of $0.24 for the second quarter. Biron reiterated his "Buy" recommendation and NIS 46 target price.
Published by Globes [online], Israel business news - www.globes-online.com - on July 30, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013