Potash Corp. cuts guidance and lowers spending, but sees silver lining as prices stabilize

, International

Potash Corp. also reported weaker-than-expected first quarter earnings of US$75 million, or US9 cents a share.

No matter how low Potash Corp. of Saskatchewan Inc. sets its expectations for the global potash market, it keeps having to go lower.

The Saskatoon-based company Thursday slashed its earnings guidance for the fourth time in five quarters as the market continued to wobble in the first few months of 2016. The potash sector has suffered due to a number of factors: rising supply, increased imports into the United States, weak demand in India and the lack of signed supply contracts with China, which are a key bellwether for the industry. Customers were cautious in Q1 as they tried to predict price trends.

The collapse in prices has been swift and dramatic. Potash Corp.’s realized potash selling price in the first quarter was just US$178 a tonne. That compares to US$284 in the same quarter a year ago, and US$238 in the last three months of 2015. At the peak of the market in 2008, spot prices for the crop nutrient topped US$900 a tonne, a level that seems inconceivable today.

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