Israel Chemicals signs 1.1m ton Chinese potash deals

Dead Sea Works picture: Tamar Matzapi

Despite the ongoing two-month strike, Israel Chemicals has agreed to supply Chinese customers with the potash in 2015.

Israel Chemicals (TASE: ICL: NYSE: ICL) reports it has signed agreements to supply its customers in China with an aggregate 1.1 million metric tons of potash during 2015. The agreements include options for an additional 100,000 metric tons. The potash selling price for the first half of the year, ICL added, will be in line with the prevailing market price in China (an increase of $10 per metric ton).

According to the contracts, which are part of three-year framework agreements between ICL and its Chinese customers, most of the quantities that are undeliverable during the first half of 2015, as a result of the strike at ICL Dead Sea, will be delivered to the Chinese customers during the second half of the year.

ICL Fertilizers CEO Nissim Adar said "The agreements we have signed with our customers in China for 2015 confirm ICL's strategy to reinforce our position in the Chinese market by marketing and selling directly to potash manufacturers and distributors. We are grateful for the trust and confidence they have placed in ICL over the years - and especially during this period - and we will continue to work diligently to strengthen their trust."

Excellence Nessuah Brokerage deputy head of research Gilad Alper last week said that he expected the crisis at ICL to hit the company's profitability. "I assume that the strike will lead to a loss of 450,000 tons of potash from the Dead Sea out of expected sales of 900,000 tons per quarter."

Talking about the strike that began at ICL's Dead Sea Works two months ago, he said, "The strike might shave 30% off ICL's operational profits in the first quarter."

Alper assesses the strike's damage including at ICL unit Bromine Compounds. "In total we see a $200 million loss on $1.3 billion first quarter revenue, 13% damage to the forecast without the strike."

Published by Globes [online], Israel business news - - on April 23, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Dead Sea Works picture: Tamar Matzapi
Dead Sea Works picture: Tamar Matzapi
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