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PotashCorp (POT) Could Curtail Up to Another 1.65MM Tonnes This Year - Analyst

August 20, 2012 11:59 AM EDT Send to a Friend
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Price: $35.27 +2.08%

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In what could have implications for the entire fertilizer sector, TD Securities analysts expect more production curtailments this year by Potash Corp. (NYSE: POT).

Last week, Potash Corp. announced that Lanigan, SK will be shut down from September 15 to October 13, 2012. This will hit production by an estimated 300,000 tonnes, according to the firm. The analyst expect further potash production curtailments this year by Potash Corp. of 0.85-1.65 million tonnes, for a total cut of 2.85-3.75 million tonnes.

For 2013, Potash Corp.'s production capability expected to be ~13.2 million tonnes versus our current potash sales forecast of 9.8 million tonnes, they note. "As such, we forecast the potash operating rate in 2013 for Potash Corp. of ~74%, which suggests we will likely see potash curtailment next year of ~3.4 million tonnes," the firm comments.

Commenting on BHP's (NYSE: BHP) Jansen project, the expect it to come on line in 2017, with most suggesting 2018. "If BHP commits to a start date on the Jansen potash production of 2017/18, we believe it would be neutral rather than a surprise either way."

TD Securities maintained their Buy rating and price target of $60 on POT.

For an analyst ratings summary and ratings history on Potash Corp. click here. For more ratings news on Potash Corp. click here.

Shares of Potash Corp. are down 0.9 percent to $43.76.




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