Workers at PotashCorp’s potash mines at Lanigan and Rocanville, Sask. have been told they’ll be off the job for up to four weeks longer than expected.
The Saskatoon-based fertilizer giant on Wednesday said its previously scheduled shutdowns at both mines will now run to March 31 at the latest.
The company said Wednesday’s "inventory adjustment" moves are "consistent with (its) practice of matching supply with market demand."
The shutdown at Rocanville, about 125 km southeast of Yorkton, was first announced in December and was originally to run six weeks, from Christmas until Feb. 4.
At Lanigan, about 40 km south of Humboldt, the shutdown was originally to run eight weeks, from Jan. 8 to March 3.
New York-based potash market analyst Charles Neivert of Dahlman Rose and Co. observed in a note Thursday morning that the two mine units are the largest in PotashCorp’s portfolio, and the capacity going offline would mean a "potential volume loss" of over 500,000 tonnes.
PotashCorp’s "extensive curtailments" of potash production, he said, have so far "not been enough to stem the inventory build in the industry as spring purchases have yet to fully begin."
Also, he wrote, China has so far stayed out of the market and may not sign new contracts until late in the first or early in the second fiscal quarter, while India likely won’t sign a new contract until July "unless compelled by a lower price offer than whatever currently exists."
Mine shutdowns, Neivert wrote, "may remain even after the end of March to help clean up the inventory."
He expects to see some "downward price movement before the spring prior to any potash price increases, as the selling season begins."