UPDATE 1-Belaruskali says operating at full capacity, Aug shipments unaffected by strike

  • Reuters
  • Commodities News
UPDATE 1-Belaruskali says operating at full capacity, Aug shipments unaffected by strike

(Updates to add comments from strike committee, Fitch analysis)

By Andrei Makhovsky

MINSK, Aug 28 (Reuters) - Belarusian miner Belaruskali, the world's largest producer of potash, said on Friday its output this month would not be affected by industrial action, after some of its workers joined large-scale protests over the country's disputed election.

The workers' strike committee, however, said that industrial action continues and has interrupted production at the miner, which is a major supplier of fertiliser to India and China and whose output is a key source of dollar revenue for Belarus.

It remains unclear what share of state-owned Belaruskali's 16,000-strong workforce, employed across six mines, had joined the strike which began after a disputed election handed Belarusian leader Alexander Lukashenko another term in office on Aug. 9.

However, the strike committee, which first announced interruptions in output at Belaruskali due to industrial action on Aug. 17, says the miner could not be operating at full capacity.

"If they are completing their plan by even 70%, that would be a major achievement. That's the maximum possible," the strike committee's press secretary, Gleb Sandras, told Reuters on Friday.

This would mean the company would be unable to deliver around 300,000 tonnes to the market, analysts at VTB Capital said in a note on Tuesday.

"While this represents 5% of global monthly supply, this amount can be offset from inventories," VTB analysts said.

Sandras also said that the company is currently keeping abreast of its orders by using material from its reserves.

The company disputed any impact on output, saying on Friday that it had been operating at full capacity since Aug. 20.

"Production volumes of potash fertilisers this month are expected to be at over 1 million tonnes, which will be around 103% of August output last year," the company said in a statement.

Belaruskali traditionally produces 1 million tonnes of potash a month, 18% of global monthly consumption, and has limited storage capacity, analysts at VTB Capital said.

If industrial action reduces supply and affects exports in the long-term, this could increase spot prices globally, Fitch Ratings said in a note this week. of (Belaruskali's) production facilities have remained operational, though likely at a reduced rate," Fitch Ratings said.

Russia's Uralkali URKA.MM and Canadian Potash Exporters (Canoptex, which exports volumes produced by Canada's Nutrien NTR.TO and Mosaic MOS.N ) are best-positioned to absorb some of the Belarusian producer's market share, Fitch Ratings said, citing data from CRU Group.

"If Belaruskali's production is materially reduced by the strikes, it would open opportunities for other producers to export to Belaruskali's... large spot markets of Brazil and Southeast Asia, to which Uralkali and Canpotex are the major suppliers."

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