“Broader emerging market concerns have weighed on customer sentiment, contributing to a weaker fertilizer environment in the second half of 2015,” said PotashCorp President and Chief Executive Officer Jochen Tilk. “In response, we are moving forward the permanent closure date of our Penobsquis, New Brunswick mine and planning inventory shutdowns in December at three of our Saskatchewan mines. While we anticipate production in the fourth quarter to be reduced by nearly 500,000 tonnes, we do not expect employee layoffs.”
Global potash demand remained strong during the quarter ended September 30 as higher volumes to Brazil, India and China helped offset slower purchasing in other markets. With many buyers moving cautiously amidst economic headwinds and significant currency volatility, prices declined in most key potash markets.
Potash shipments for the quarter reached 2.2 million tonnes, increasing the total for the first nine months of 2015 to 7.0 million tonnes driven largely by offshore demand. Sales volumes for both the quarter and the full year surpassed the results for the comparable periods in 2014. In light of market factors, the management has revised full-year expectations for the company’s potash business, and lowered sales volume guidance to a range of 9.0-9.2 million tonnes.
Consistent with its strategy of matching supply to demand, the company is accelerating the permanent closure date of its Penobsquis mine in New Brunswick to the end of November (annual operational capability of approximately 800,000 tonnes). While this will reduce available production levels until its new Picadilly mine is fully ramped up, it is expected to improve the company’s cost profile and help manage inventories.