1 Potash Outlook Kevin Stone Natural Resources Canada TFI Fertilizer Outlook and Technology Conference Fort Lauderdale, Florida November 16, 2016
2 Outline Historical Consumption and Supply Outlook for Demand and Supply Demand Fundamentals Major Consuming Countries Major Suppliers Summary
3 Historical Potash Consumption and Supply
4 Historical Consumption World Potash Consumption (000 t K 2 O) 35,000 30,000 25,000 22,095 22,855 23,398 26,148 27,654 25,967 26,674 28,793 24,358 22,535 27,294 28,837 29,262 30,495 32,294 32,325 000 tonnes K2O 20,000 15,000 10,000 5,000 Sources: IFA, NRCan 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
5 Historical Production 45,000 World Potash Production (000 t K 2 O) 40,000 38,628 38,908 000 tonnes K2O 35,000 30,000 25,000 20,000 25,874 25,859 26,468 27,967 31,167 32,794 29,426 33,531 32,498 19,126 31,767 34,372 32,048 33,610 15,000 10,000 5,000 Sources: IFA, NRCan
6 Supply Exceeded Consumption 10,000 World Potash Supply/Use Balance (000 t K 2 O) 000 tonnes K2O 8,000 6,000 4,000 2,000 3,779 3,004 3,071 1,818 3,513 6,826 2,752 4,738 8,140 4,473 5,535 2,786 3,195 6,334 6,583 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2,000 4,000 3,408 Sources: IFA, NRCan
7 Outlook for Demand and Supply
8 Demand Outlook 45,000 Demand Forecast (000 t K 2 O) 40,000 35,000 6,200 6,300 6,400 6,500 6,700 30,000 000 t K2O 25,000 20,000 15,000 10,000 5,000 32,700 33,700 34,700 35,600 36,500 2016 2017 2018 2019 2020 Demand for Fertilizer Demand for Industrial Use Sources: IFA, NRCan
9 Supply Outlook 000 t K2O 65,000 60,000 55,000 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Potential Supply (000 t K 2 O) 64,500 61,600 62,100 58,100 56,000 49,700 51,000 47,200 44,900 42,800 43,200 44,300 40,800 38,600 36,600 2016 2017 2018 2019 2020 Capacity Supply Available for Fertilizer Sources: IFA, NRCan
10 Forecast Oversupply 000 tonnes K2O 50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Demand/Supply Balance for Fertilizer Use (000 t K 2 O) 43,200 44,300 40,800 38,600 36,600 32,700 33,700 34,700 35,600 36,500 2016 2017 2018 2019 2020 Supply for Fertilizer Demand for Fertilizer Sources: IFA, NRCan
11 Actual Oversupply and Forecast 10,000 Oversupply Forecast (000 t K 2 O) 8,000 6,000 4,000 2,000 3,779 3,004 3,071 1,818 3,513 6,826 2,752 4,738 8,140 5,535 4,473 2,786 3,195 6,334 6,583 4,900 3,900 7,600 7,800 6,100 Forecast 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2,000 4,000 3,408 Sources: IFA, NRCan
12 Demand Fundamentals
13 Population Growth World Population Growth (billion) Billion 10 9 8 7 6 5 4 3 2 2.5 2.8 3.0 3.3 3.7 4.1 4.4 4.8 5.3 5.7 6.1 6.5 6.9 7.3 7.8 9.5 9.2 8.8 8.5 8.1 Forecast 9.7 1 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Source: UN
14 World Arable Land 1,440 World Arable Land (million hectares) 1,420 1,400 1,380 Million hectares 1,360 1,340 1,320 1,300 1,280 1,260 1,240 1,220 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Source: FAO
15 Arable Land Per Person 1.00 Hectares of Arable Land Per Person 0.90 0.80 0.70 0.60 Hectares 0.50 0.40 0.30 0.20 0.10 196119631965196719691971197319751977197919811983198519871989199119931995199719992001200320052007200920112013 Source: World Bank World Average Arable Land per Person China India Brazil USA
16 Potash Use by Crop Global Potash Use by Crops, 2010/11 Sugar Crops 8% Other Crops 15% Cereals: Wheat, Rice, Corn and Others 37% Fruits and Vegetables 20% Source: IFA Oilseeds: Soybean, Oil Palm and Others 20%
17 Grain Production 2,500 World Grain Production (million tonnes) 2,000 million tonnes 1,500 1,000 Forecast 500 Source: USDA Wheat and Coarse Grain Rice Milled
18 Fruit and Vegetables Production 2,000 World Fruit and Vegetables Production (million tonnes) 1,800 1,600 1,400 million tonnes 1,200 1,000 800 600 400 200 1961 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Source: FAO Vegetables and Melons Fruit Excluding Melons Citrus Fruit
19 Oilseeds Production 600 World Oilseeds Production (million tonnes) 500 447 461 447 475 504 537 519 534 400 384 394 406 392 400 million tonnes 300 200 100 261 287 295 304 314 325 332 338 Forecast 0 Source: USDA
20 Major Consuming Countries
21 China 12,000 Production, Imports and Consumption (000 t K 2 O) 10,000 8,000 tonnes K2O 6,000 4,000 2,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: FAO, IFA Production Imports Consumption
22 China Demand/Supply Outlook 12,000 Forecast: Production, Imports and Demand (000 t K 2 O) 10,000 8,000 000 t K2O 6,000 4,000 2,000 Forecast 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Production Imports Demand Sources: FAO, IFA
23 United States 7,000 Production, Imports and Consumption (000 t K 2 O) 6,000 5,000 000 t K2O 4,000 3,000 2,000 1,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: FAO, IFA Production Imports Consumption
24 Brazil 6,000 Production, Imports and Consumption (000 t K 2 O) 5,000 4,000 000 t K2O 3,000 2,000 1,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: FAO, IFA Production Imports Consumption
25 India 4,000 Imports and Consumption (000 t K 2 O) 3,500 3,000 2,500 000 t K2O 2,000 1,500 1,000 500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Imports Consumption Sources: FAO, IFA
26 http://www.potash4life.com/films/thepowerofpotash/
27 Malaysia and Indonesia 3,500 Imports and Consumption (000 t K 2 O) 3,000 2,500 000 t K2O 2,000 1,500 1,000 500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Imports Consumption Sources: FAO, IFA
28 Major Suppliers
29 Canada Production and Exports (000 t K 2 O) 12,000 10,000 8,361 9,229 10,332 10,140 9,648 9,684 8,518 11,085 10,379 10,591 10,121 9,700 9,443 10,686 10,404 8,976 10,196 9,829 10,818 11,350 10,602 10,967 8,000 8,455 8,515 8,333 8,606 000 t K2O 6,000 4,000 4,297 4,176 2,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e Sources: NRCan Production Exports
30 Forecast Methodology: Potential production is based on average of the actual operating rates in the last five years.
31 Canada - Supply Outlook 25,000 Capacity and Production Potential (000 t K 2 O) 22,003 22,558 22,558 22,558 22,558 20,000 17,633 19,000 17,074 17,505 17,505 17,505 17,505 000 t K2O 15,000 10,000 12,688 11,638 13,847 12,540 14,522 14,888 14,888 14,888 14,888 5,000 10,818 11,350 65% 5,155 0 2014 2015 2016 2017 2018 2019 2020 Sources: NRCan Capacity Actual Production Capability Production Potential
32 Russia Production and Exports (000 t K 2 O) 8,000 7,000 6,000 5,599 6,266 5,724 6,373 5,935 6,128 6,526 5,460 6,000 7,260 6,221 6,840 000 t K2O 5,000 4,000 3,000 4,432 3,227 4,653 3,732 4,570 5,325 4,989 5,403 5,159 3,691 5,021 5,460 4,382 4,815 5,493 2,000 2,643 1,000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Production Exports Sources: IFA, NRCan
33 Russia - Supply Outlook 12,000 Capacity and Production Potential (000 t K 2 O) 10,000 9,810 9,810 9,510 9,510 000 t K2O 8,000 6,000 7,470 7,260 6,125 6,665 6,125 6,000 8,829 8,829 8,559 8,559 4,000 2,000 90% 2014 2015 2016 2017 2018 2019 2020 Sources: NRCan Capacity Actual Production Production Potential
34 Belarus Production and Exports (000 t K 2 O) 7000 6 202 6 297 000 t K2O 6000 5000 4000 3000 3781 3283 4 229 3 735 4 928 4 612 4 143 4 121 4 605 3 963 4 972 4 968 4 391 3 936 2 485 5 223 5 306 4 719 4 137 4 774 3 608 4 179 3 418 5 685 5 513 2000 1 788 1000 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Production Exports Sources: IFA, NRCan
35 Belarus - Supply Outlook 10,000 9,000 8,000 Capacity and Production Potential (000 t K 2 O) 7,600 7,620 7,680 7,740 7,800 8,800 8,800 000 t K2O 7,000 6,000 5,000 4,000 3,000 2,000 1,000 6,202 6,297 6,374 6,424 6,474 7,304 7,304 83% 2014 2015 2016 2017 2018 2019 2020 Sources: NRCan Capacity Actual Production Production Potential
36 ICL Production and Exports (000 t K 2 O) 3,500 3,000 3,160 2,962 3,094 3,086 000 t K2O 2,500 2,000 1,500 1,000 2,138 2,224 1,918 1,958 1,752 1,872 1,897 1,844 2,123 2,146 2,134 2,052 1,821 1,346 2,466 1,537 2,551 2,812 2,556 2,734 2,313 2,643 2,517 2,248 500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Production Exports Sources: IFA, NRCan
37 ICL - Supply Outlook 4,500 4,000 Capacity and Production Potential (000 t K 2 O) 3,829 3,840 3,851 3,862 3,884 3,884 3,884 3,500 000 t K2O 3,000 2,500 2,000 3,086 2,518 2,850 2,858 2,874 2,874 2,874 1,500 1,000 74% 500 2014 2015 2016 2017 2018 2019 2020 Sources: NRCan Capacity Actual Production Production Potential
38 Germany Production and Exports (000 t K 2 O) 4,000 3,626 3,565 3,626 3,665 3,616 3,619 000 t K2O 3,500 3,000 2,500 2,000 1,500 2,868 2,981 3,025 2,980 3,015 3,033 3,285 2,523 1,789 1,585 2,962 3,106 3,056 2,968 2,730 2,784 2,443 2,502 3,053 3,055 2,642 2,715 1,000 500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Sources: IFA, NRCan Production K2O Exports
39 Germany - Supply Outlook 4,500 4,000 3,500 4,250 4,250 Capacity and Production Potential (000 t K 2 O) 3,650 3,650 3,650 3,650 3,650 000 t K2O 3,000 2,500 2,000 3,053 3,055 2,628 2,628 2,628 2,628 2,628 1,500 1,000 72% 500 2014 2015 2016 2017 2018 2019 2020 Sources: NRCan Capacity Actual Production Production Potential
40 Summary Demand is projected to grow at a slow pace of 2.3% per year between 2016 and 2020 Supply growth is projected to increase at 2.5% per year for the same period Capacity is projected to grow at 4.5% per year between 2016 and 2020 Global operating rate is forecast to be lower than 80% per year between 2016 and 2020 (86% in 2010-15) Oversupply is projected to follow the historical trend Bottom line is both demand and supply will grow, but just at slower pace
41 Contact Kevin Stone Senior Advisor Mineral and Metal Sector Natural Resources Canada Telephone: +1 343-292-8732 Email: kevin.stone@canada.ca