Sterling Group Ventures Inc. (fka SGGV)

[hitpaydirt]

i lifted this from a story in june on prices......



TER: Let's move on. The price of fertilizer has risen steadily for 12 months or so. Do you expect that trend to continue?
PR: Over the last year or so, the price of fertilizer is up about 10%. It has essentially been able to put small incremental increases in and hold them—both in the potash and phosphate spaces. That suggests that the issues that we had in 2013 with the break-up of state-owned Belaruskali and Uralkali (URKA:RTS) (URKA:MCX) (URKA:LSE), which really punished market pricing, are behind us. Now, the pricing negotiations with India and China are based mostly on supply and demand dynamics as opposed to market share dynamics. We're looking at a potash price now of about $306/ton and a rock phosphate price of around $115/ton.
TER: At the moment, fertilizer seems to be a largely oversupplied market. Can investors make money in this space in the near term?
PR: Yes, if they are selective and pick out those situations that have clear marketing and production advantages over existing producers. Morocco dominates the rock phosphate market on an international trade basis, but it produces rock phosphate as opposed to the more enriched sulfur phosphate. The country is now attempting to produce enriched products so that it's not selling away raw-rock enrichment price advantage in the fertilizer market. But it will take time to adjust.
In the potash market the big players are PotashCorp. (POT:CA) (POT) in Saskatchewan, and Belaruskali and Uralkali in the Russian states. Israel Chemicals Ltd. ($ICL) has spent the year positioning itself for the future by joint venturing with U.S.-based Albemarle to manufacture the latest fire retardants and then making a bid for Allana Potash Corp. (AAA:CA) (ALLRF) . Israel Chemicals needed to get potash supply that was going to be at the very best end of the price curve. Allana's Danakil potash project in the Danakil Depression in East Africa should be the lowest-cost place to produce potash over the next 20 years.
TER: Are there other potash or phosphate companies that you're following?
PR: One is Sirius Minerals Plc (SXX:LSE). For about 18 months the company has been working diligently with various U.K. planning authorities to get the final approvals needed to put its underground York potash mine into production. It is essentially moving through the last hurdles. The interesting thing is that immediately adjacent to the existing, producing Boulby potash facility, Sirius has a polyhalite deposit. Polyhalite is a potash-bearing mineral that had not previously been a significant accepted raw material component in the fertilizer market, but Sirius has demonstrated to various offtakers that polyhalite is a commercial material in its own right. Now it's just a question of the final regulatory permissions, and it will begin construction.
TER: Polyhalite is not a narrative that you typically hear in the potash space.
PR: Most potash mines are working with the mineral sylvite because it is a solution-extractable material. It also has slightly higher potassium content than polyhalite. But because polyhalite has higher proportions of magnesium and sulfur in it than sylvite, fertilizer manufacturers don't have to add as much of these to make blended fertilizers. For certain fertilizer blenders, that's a cost advantage.
TER: Are you following any other fertilizer companies?
PR: Another one is Sociedad Química y Minera de Chile S.A. (SQM) (SQM-B:SSX) (SQM-A:SSX) because it also produces some byproduct lithium and iodine.
I follow a little phosphate company called Focus Ventures Ltd. ($FCV:CA) because it offsets the big Bayovar deposits in northwestern Peru on the same productive horizons.
And I still personally follow DuSolo Fertilizers Inc. ($DSF:CA). DuSolo has chosen to go the low capital expenditure route to quickly move into production. The company is in Brazil, which is geologically and commercially short of both potash and phosphate for fertilizer. DuSolo produces coarse phosphate for the local agricultural market. DuSolo can essentially sell a bag of crushed raw rock or slightly enriched material directly to the farmers without having to blend it into higher-grade fertilizers at additional expense. That preserves its margins. By the same token, it doesn't have to build a costly plant to position itself in the higher-end enriched fertilizer component of phosphate and feedstock. I follow DuSolo quite closely.
TER: Do you have some parting thoughts on the batteries materials market?
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