why potash is a key resource

Why Potash is a Key Resource

Potash (a potassium salt) and phosphate are two of the key raw ingredients for the fertiliser industry. And both of them are produced by mining.
The potash sector had been wallowing since the start of last year, despite potash prices holding firm.

However, the major potash stocks have finally turned around over the last 2 months — roughly in line with the corn price.

Majors like Potash Corp (NYSE:POT) have all jumped more than 20% in this time, while the rest of the mining sector crashed around them.

Potash was the darling of the Aussie market a few years ago, after BHP made a bungled bid for Potash Corp. As the excitement passed, the prices of ASX potash stocks slowly fell, as the hordes moved on.

But while the market has been looking elsewhere, some of these potash stocks have been very busy. I’m still following one of the stocks that I tipped for Diggers and Drillers readers, and the price is less than half of what it was when I tipped it. There is hardly a shortage of under priced resource stocks on the market today, but the value in this stock is remarkable.

Generally, Aussie potash stocks move up and down closely with the Canadian majors.

But so far the Aussie market seems to have completely overlooked the fact that the Canadian potash majors are now rallying.

So we may have a double opportunity here.

At some point, and probably soon, the Aussie potash juniors will start playing catch-up to the 20% rally seen in the Canadians. Meanwhile, the market should also start pricing in the progress made by those stocks that have been quietly getting on with things.

I’ve been watching and waiting for this turnaround, and for some potash stocks it looks like we might be witnessing the very start of it right now. Let’s hope so.



http://potashandphosphate.com/why-potash-stocks-are-set-to-gain-from-a-global-food-warning/