Arab Potash Co. (APC) said Oct. 7 it had concluded a new potash supply contract with Sinochem Macao for the delivery of about 600,000 mt, including optional quantities, which will be shipped “during 2018 and part of 2019.” The volumes agreed are down on last year when about 700,000 mt of various grades were concluded, although last year’s contract settlement came earlier, in late July.
The Jordanian producer said the terms and conditions agreed are in line with current market prices and terms. Belarus Potash Co. (BPC) was the first supplier to settle a new seaborne contract price with China, on Sept. 17 agreeing a new price of $290/mt CFR with China’s buying consortium, comprising Sinochem, CNAMPGC and CNOOC, for the deliveries through June 2019. It has been past practice for other suppliers to subsequently settle their seaborne supply contracts at the same price with China as the first supplier to reach a deal. Until now, BPC is the only supplier to officially announce a conclusion with China.
APC said the expected financial impact of the new China supply deal on the company before income tax, royalties and production costs is around JD125 million (approximately $176.3 million) spread over the years 2018 and 2019 based on the shipping schedule.