K+S Group, Kassel, Germany, this week reported that its Bethune, Sask., potash operation produced almost 2 million mt of potash last year for the first time. In its FY2020 earnings release on March 11, the company highlighted the high product quality at the Canadian site.
Responding to an analyst’s question at a company earnings call on March 11 about Bethune volumes, K+S Chairman Burkhard Lohr said K+S already had used up all the options that the company has onsite at Bethune to increase granular production compared to standard production.
“We have thought about using third parties, but that will be more or less not possible due to the logistics required for that,” said the chief executive. “So, it’s optimization [at the site] for the time being.”
On the question of why the company still is not putting significant tons from Bethune into the U.S. market several years after production start-up, Lohr reported that K+S shipped 100,000 mt of potash into the U.S. market in 2020 and will increase that to 150,000 mt this year.
He said K+S’ U.S. customers are “more than happy” with the granular quality, but the limiting factor is logistics, adding that the company will ramp up the volume year-by-year.
Following the announcement of Belarus Potash Co.’s (BPC) settlement of a new supply contract with Indian Potash Ltd. (GM Jan. 29, p. 17), K+S said it will refrain from deliveries to India until further notice due to the agreed price of $247/mt CFR being significantly below the level currently prevailing on important export markets, and given the “very favorable demand for potash fertilizers in all important sales regions for the upcoming spring season,” (GM Feb. 5, p. 16).
Lohr said this week since the company is not shipping tons to India, that impacts on what K+S can produce in terms of granular. “So we are doing that and shipping it to the U.S. and Brazil,” he told analysts. “And of course, a significant amount of standard will be shipped into China and other Southeast Asian countries.”
However, the chief executive did not confirm whether K+S has inked new contracts with its Chinese customers.