Israel's ICL MOP output down by 10pc in 2017
London, 14 February (Argus) — Israeli fertilizer and chemicals producer ICL's potash production dipped by 9.6pc on the year in 2017.
This was a result of maintenance operations at the firm's Dead Sea plant, lower production in Spain on low-grade ore, and a move from MOP production to polyhalite in the UK.
Although output was steady at around 1.3mn t in the fourth quarter, full-year production only reached 4.8mn t, compared with 5.3mn t a year earlier.
Although output was down by nearly 10pc, sales to external customers were down by less than 3pc year on year at 4.7mn t. Closing inventories at the end of 2017 were at 400,000t, compared with 670,000t at the end of the previous year.
The firm's average potash selling prices were at $219/t fob last year, compared with $211/t fob a year earlier. Fourth-quarter 2017 fob average sales prices were at $222/t, up by $20/t on the year.
The company noted higher potash prices in Asia, Europe and South America, but lower quantities being sold in North America, and the rest of the world, excluding the three regions already mentioned.
Polyhalite sales were up by 50pc on the year, ICL said today. It aims to produce 600,000t of Polysulphate — the company's brand name for polyhalite — this year, and 800,000t next year. It also intends to launch a new product, a compressed mix of Polysulphate and potash called PotashpluS, in the middle of this year.
ICL swung to a profit of $364mn last year, from a loss of $122mn a year earlier, supported by a recovery in potash prices, especially in the fourth quarter, and a reduction in general and administration expenses.
ICL's operating income benefited from a higher share of potash sales from its lower-cost Dead Sea operations, as well as the higher potash prices. It is looking to reduce its debt ratios this year, and expects to cut production costs further at its Dead Sea operations on increased production rates.
"ICL has successfully divested low-synergy assets, which have helped to reduce debt, enhance financial stability and create additional resources for future growth," ICL chairman Johanan Locker said today. Looking forward, ICL will focus on strengthening the competitiveness of its mineral assets and continue to expand its speciality business, he added.
A recent deal with Energean Israel to supply 13bn m³ of gas over 15 years will begin in the second half of 2020. ICL said the deal would provide a consistent supply of gas at a competitive price compared with its current supply agreements. The deal is still subject to regulatory and shareholder approvals.