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US phosphate export group PhosChem disbands
The 39-year-old Phosphate Chemicals Export Association Inc handled U.S. exports of the crop nutrient on behalf of Mosaic and Potash Corp of Saskatchewan.
Minnesota-based Mosaic, which supplied 93 percent of PhosChem’s export volume, confirmed in an email to Reuters from spokesman Rob Litt that the export association had disbanded.
A Potash Corp spokesman could not immediately be reached for comment.
The disbanding of PhosChem, which had net sales of $1.3 billion for the year ended May 31, 2013, follows Uralkali OAO ‘s departure from the Belarusian Potash Company (BPC) in July.
PhosChem, however, is not nearly as dominant a player as BPC or its North American potash exporting rival Canpotex Ltd.
PhosChem supplied 60 percent of North American phosphate exports and 10 percent of global seaborne trade, said Scotiabank analyst Ben Isaacson in a note to clients, adding that the news should not affect the valuations of Mosaic and Potash.
Mosaic’s decision this year to form a phosphate joint venture with Saudi Arabian mining and metals company Ma’aden and petrochemical company Saudi Basic Industries Corp JSC (SABIC) is likely the reason for the move, Isaacson said, as Mosaic would likely supply India with phosphate from Saudi Arabia rather than Florida.
The move is also logical given that Potash Corp had started directly selling its phosphoric acid, and its sales via PhosChem have dwindled, said BMO Nesbitt Burns analyst Joel Jackson. (Reuters)
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