Sunday, January 26, 2014

Cost Cuts Aren't Enough for Potash Corp.


After several weak months of potash pricing caused by the collapse of the Belarusian Potash marketing arrangement, Potash Corp. (NYSE: POT  ) made a decision last month to cut costs in just about every corner of the company. Considering the apparent pricing advantage of Russian producer OAO Uralkali, will those cost cuts be enough to matter?

Potash is a Canadian-based fertilizer stock that controls a majority of the Canpotex marketing partnership. Both Mosaic (NYSE: MOS  ) and Agrium (NYSE: AGU  ) provide a smaller level of potash to what is commonly referred to as the Canadian potash 'cartel.' Besides potash, Potash Corp. mines other fertilizers including phosphates and nitrogen, but previously potash was the most important by far, providing gross margins approaching 60% and a majority of the gross profit generated by the company.

Read the full article here.


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