BHP said global potash segment heading towards renewed balance

HOUSTON (ICIS)–Mining major BHP said after a rough stretch for the global potash segment, it appears it is heading now towards finding renewed balance with improvements in both demand and supply.

The company said it has also continued to advance its construction efforts at the Jansen potash project in Saskatchewan, Canada, with stage one currently ahead of schedule.

In its economic and commodity outlook, BHP said potash prices have been on a downward trend over the last 18 months as the industry has been resetting after dealing with stark price movement and severe supply disruptions of recent years.

The producer said one indicator that the market was returning to normal pace was that the magnitude of price movements in the first half of 2024 was less pronounced compared to a year ago.

Looking at regional demand performance, it said a broad recovery has continued from the lows of 2022 with total muriate of potash (MOP) deliveries expected to reach, or exceed, the pre-Ukraine conflict levels during this year.

Supply also increased further with export volumes from Russia and Belarus edging closer to their 2021 peak with Laos adding 2-3 million tonnes of capacity over the last few years.

BHP said Canadian volumes this year point to an improved production level.

“Balanced though does not mean that the market is at rest. The industry remains in the midst of a significant disequilibrium, slowly adjusting from the major shocks of recent years,” said BHP.

“The compelling demand picture, rising geopolitical uncertainty and the maturity of the existing asset base collectively provide an attractive, accelerated entry opportunity in a lower–risk supply jurisdiction such as Saskatchewan, Canada.”

It was also revealed that construction at the Saskatchewan potash project is ahead of the original schedule with Jansen stage 1 now 52% completed.

The first production is targeted for late 2026 with this phasing having an annual output projected around 4.15 million tonnes.

Jansen stage 2 is 2% complete with first production from this segment anticipated in 2029.

Back in July the company had said Jansen had reached a pivotal milestone with construction having surpassed the 50% completion mark for stage 1 and stage 2 underway.