Tel Aviv — An increase in global potash production over the next few years is expected to slow growth at Israel Chemicals Ltd. (ICL), according to a report by Leader Capital Markets, a leading Tel Aviv-based investment bank. The report predicts that rising potash production could lead to industry-wide utilization declining from 90 percent in 2011 to 80 percent in 2015, and for potash prices to fall from $450/mt to $430/mt. This is based on an expected increase in global potash capacity of 16 million tons, or 25 percent, to 80 million mt/y. Although ICL net profits in 2012 are predicted to be $1.4 billion on revenues of $7.1 billion, based on a 4 percent drop in the quality of potash sold and on stable prices, the report foresees a 10 percent drop in prices and quantities of potash sold over the next three years. Another factor is the $1.7 billion cost of removing the salt accumulations from the Dead Sea evaporation ponds as part of the agreement signed earlier this year with the Israeli government. ICL is planning to increase potash production at the Dead Sea, as well as in Spain. Capacity is being increased from 6 million mt to 6.5 million mt by 2015. ICL said recently it believes it is shielded somewhat from the rising capacity as it has low potash production costs. Regarding India, ICL said that it expects a new agreement with Indian customers to be signed in the third quarter.
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