If there was any doubt, there is very little now that just about every new potash expansion plan has been put on ice. It is time for the dominant low-cost producers to lower the boom on the Jansens of the world by saying 'You thought the project would work at $500 a ton? How about $300 a ton?' There is already over-capacity and these humongous greenfield expansion plans will cause ridiculous supply surpluses, so Uralkali has made a dramatic announcement that just about guarantees everybody stops expansion sans the inexpensive brownfield projects of the dominant low cost producers. Uralkali almost staged the announcement for maximum impact, because my guess is the price decline will end up being more temporary and less severe than expected. But hey - if you want BHP and Rio Tinto and just about all others to put all potash plans on ice, you couldn't have done a better job. In the end, the industry supply/demand characteristics will remain more balanced this way. Uralkali stock has dumped with the other industry players and I sense this player is talking the talk for maximum impact but is less likely to walk the walk.
as a long term investment paying a nice return at this pps, who cares what a party that will 1) break a contract will do for you? Uralkali is now a known contract-breaker and the domino efffect of their bad behavior* is having hair-bumpy ripply noise out to bond issues, long term capital investments/projects, etc. whole lotta noise. noise. ...not a tsunami, nuke meltdown, macando, bhopal---not anything of that nature. just some cartel-frat-boy noise. -- oh. and some new "promises" from 1 frat boy to the globe that he can supply said globe for lower cost and keep up volumes? prove it. even uralkalis own expansion plan prior to this poopy diaper episode couldn't have done this ...but now, like a cartoon, it magically can? oh, but let's listen to the noise on it.
wait. let's look out further. Are there starving people, nations, whatever, on earth? yes or no. if the answer is yes, whatever price pot is going for per tonne is too cheap. Or there's a distribution problem or political problem which will always inflate the price of any commodity. Not a catastrophe, more noise/politics #$%$ behavior versus a real glut/shortage/blight--whatever gut wringer. For example: IF there is so much pot on the planet, why are all those people STARVING in NORTH KOREA? okay-if this is fact, what IS the correct price per tonne for potash ...anyone? anyone? Buehler? soooo. Africa. won't even get started. But there's such a "glut" of fertilizer on the planet world leaders and great big billion dollar corporations are SO STUPID they can't get this abundant fertilizer to these starving nations... um hmm.
so since no analyst is actually quantifying fertilizer per mouth per human needed for some minimum daily requirement of calories to be healthy as a human divided by the known supply of fertilizer etc... but millions of people are starving right now, i'd say there's not any over supply of product.
If you look at the shipping industry where over supply of ships killed them. They had high rates and kept building more ships that resulted eventually in low rates and some bankruptcies due to the over supply. This move was probably good for the health of the potash industry.