| Why Mosaic’s Phosphate Prices Have Not Declined Much | |
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Why Mosaic Could Be More Competitive in the Fertilizer Industry (Continued from Prior Part) Phosphate prices
Phosphate fertilizer prices are key to Mosaic’s (MOS) phosphate segment’s revenue, earnings, and stock price. In this business, prices are largely driven by industry supply and demand. The average selling prices of phosphate declined to $450 per ton in 2Q15 from $465 per ton in 2Q14.
Phosphate prices
Phosphate prices have fallen since 2011 as a result of added new capacity, along with subsidies in India and the depreciating Indian rupee. The decline in phosphate prices during the quarter was attributable to higher North American imports, lower crop prices, and lower raw material costs.
Despite the decline, phosphate prices have remained firm over the year. There were supply-side issues with about nine global plant outages, according to the company.
There are concerns over prices being pushed down further due to excess supply coming from China. However, during the earnings call, the company stated that Chinese suppliers may be subject to value-added tax (or VAT). This would limit the price competitiveness of those suppliers and should be price supportive.
The company guided that phosphate prices (diammonium phosphate) are expected to be in the range of $435–$455 per ton, which is on the lower end in 3Q15. The changes in phosphate prices should also be beneficial to the Market Vectors Agribusiness ETF (MOO). MOO holds 13.6% of Mosaic (MOS), Potash (POT), and Agrium (AGU) as a percentage of its total portfolio.
A fertilizer company’s revenue is impacted by the prices of fertilizers as well as volumes. In the next part, we will see how Mosaic’s phosphate segment volumes were impacted during the quarter, as well as management’s guidance.
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Prb Energy Inc.
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CODE : PRB |
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Prb Energy est une société développant des projet miniers et de pétrole basée aux Etats-Unis D'Amerique. Prb Energy est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 214,4 millions US$ (188,5 millions €). La valeur de son action a atteint son plus bas niveau récent le 25 avril 2008 à 0,10 US$, et son plus haut niveau récent le 28 juin 2019 à 24,58 US$. Prb Energy possède 8 722 000 actions en circulation. |