"The problem with potash is that there is currently so much capacity," Persona told IM. "Uralkali does seem to be taking a more sensible approach now to allow demand to grow by pulling out of production. Uralkali, PotashCorp. and EuroChem are all carrying out expansion programmes, however, Uralkali thought it could increase production and still make the same margins, but that hasn't been the case." "Until about 2006 things stayed low, and then the world caught up with itself," EuroChem's mining director, Clark Bailey, told IM. "The ratio of NPK producers to demand was almost 100% - that's almost unheard of. Now it's probably in the 80s, which means there is still room to continue to grow." "It was Uralkali's announcement that had more of an effect on prices than anything, rather than the actual split," Persona told IM. "But, if BHP plays, then it's a different question."
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