Addition of Potassium M & A Case of Ministry of Commerce or Anti-monopoly Review

The Ministry of Commerce of the People's Republic of China has begun to pay close attention to BHP Billiton's purchase of Canadian Potash Corp.

At the regular press conference held by the Ministry of Commerce yesterday (September 15th), spokesman Yao Jian said that as the specific implementation department of the anti-monopoly law, the Ministry of Commerce is mainly responsible for the management and reporting of operators. "We will pay attention to the situation of this transaction. If this transaction is formally reported, the Ministry of Commerce will review it according to law."

In 2008, China's dependence on potash fertilizer imports was 55%, which means that China's use of potash 55% depends on the international market. Last year, the figure was 28%, Yao Jian said that although the domestic potash fertilizer production and sales capacity have improved, but the dependence on the international market is still relatively large.

The person with the largest potash fertilizer company, Salt Lake Potash, told the “Daily Economic News” reporter that China’s annual potash demand is 7 million tons, domestic production is 3 million tons, and the gap’s 4 million tons needs to be imported from abroad.

The above-mentioned sources are concerned that if BHP Billiton's acquisition is successful, it will jeopardize the safety of the domestic potash industry and trigger further price increases.

Zhang Shiguo, head of the research department of China Overseas Investment Association, believes that the direct impact of BHP Billiton's acquisition on domestic potash fertilizer prices will not be particularly large. He pointed out that BHP Billiton, as an international mining giant, laid out the potash fertilizer industry for the purpose of diversifying its resources after the iron ore layout was completed, and it was normal to control the resources. "And this can only show that the international supply of potash is relatively concentrated, if its price increases significantly, it will surely reduce its own shipments, and it is impossible to obtain much revenue."

As for the industry’s “if the acquisition is successful, BHP Billiton will have 20% stake in Sinochem Fertilizer”, Zhang Shiguo said that Sinochem is still a major shareholder. Sinochem Fertilizer's shareholders are diversified and their income is more secure. bad thing.

Zhang Shiguo believes that this acquisition has a "psychological impact" on China's potash supply market that is greater than "actual shocks."

It is reported that although domestic potash resources are insufficient to satisfy supply, rational and effective use can also alleviate the shortage of potash fertilizer. Salt Lake Industrial Group told reporters that the quality of potash produced by them is the same as foreign products, but the prices are even lower. However, due to their concentration in Qinghai, the lack of transport wagons has caused many buyers to choose to import them.