What are the investment opportunities behind the Potash War?

On August 18th, the world’s largest potash fertilizer producer, Potash Corp. of Saskatchewan, Canada, met with the hostile takeover bid launched by BHP Billiton, the world’s largest mining company, for a total value of USD 39 billion. In a flash, related companies in China were involved in this acquisition war because a large part of China’s imported potash fertilizer came from Saskatchewan. Taking the data for 2008 as an example, China’s import volume from the company was 1 million tons. It accounted for about 28% of the total 3.95 million tons of potash fertilizer imported from China in 2008, and Saskatchewan also holds 22% of Sinochem Fertilizer, which manages an important share of China's potash fertilizer imports.

Under the increasingly monopolistic appetite of international potash giants, what impact will China's related industries be affected? According to statistics from the China Inorganic Salt Industry Association, the apparent consumption of potassium salt in China was 5.882 million tons in 2008, and the potassium fertilizer was 5.172 million tons, of which 2.775 million tons of domestic potassium salt, 3.429 million tons of imported potassium salt, and 142,000 tons of potassium salt for export. Imported potassium salt accounts for about 55% of the apparent domestic potassium salt consumption. Guo Xiao Securities industry analyst Zhang Xiaohui also told reporters that at present China's annual demand for potassium fertilizer has 8 million tons, of which more than 50% are dependent on imports.

"From the perspective of resource prices, the acquisition will certainly cause the market to re-evaluate the value of potash resources." Hua Jian Securities industry analyst Wu Jianping told reporters, but from the product price point of view, the demand for potash will not have much increase, supply and demand There is no serious imbalance in the relationship. Zhang Xiaohui also said that although there is a certain monopoly pricing after mergers and acquisitions, but from the perspective of product supply and demand, the supply of potash is still greater than the demand, and after large companies mergers and acquisitions, or to expand production capacity, there is pressure on the price, so potash fertilizer The price will not rise sharply.

However, Minsheng Securities believes that due to the relatively full start of domestic compound fertilizer companies, the need for second-time replenishment and the gradual advancement of autumn farming, and the strong domestic demand for potash fertilizer, the prospects for the potash fertilizer industry will increase in the future, and the price of potash fertilizer will increase. All the way up.

"Actually, the A-share market really only benefits from the potash price increase should be only Salt Lake Potash, Salt Lake Group, CITIC Guoan, Guannong shares." Wu Jianping said that the most optimistic about the salt lake potash.