Saudi Arabian Fertilizers ratings cut
Riyadh, April 2, 2011
Credit Suisse downgraded Saudi Arabian Fertilizers Company (Safco), a leading Middle Eastern nitrogenous fertilizer producer, to "neutral" from "outperform," anticipating weak urea prices in the short term.
A fall in fertilizer demand in the second quarter after the spring planting in the United States and a weak corn market would keep urea prices below $360/tonne levels, Credit Suisse said.
In the medium-to-longer term, the brokerage also sees risk that marginal producers' urea floor price will likely be pushed $40/tonne lower owing to domestic industry consolidation.
Leading marginal urea producer and price setter Ukraine's "benign relationship" with Russia to secure cheaper natural gas supplies from Gazprom could hurt urea prices, it added.
Safco is among the lowest cash cost producers of ammonia and urea globally. Credit Suisse cut its price target on the stock to 190 riyals from 232 riyals.-Reuters
More Industry, Logistics & Shipping Stories
- Tata Steel rules out EU assets sale
- Egyptian firm Maridive inks $150m Islamic loan
- GPIC marks work safety milestone
- Sabic unveils green plastics for construction
- Sabic opens new facilities in Jubail
- Asry plans multimillion dollar floating dock
- TNT unveils new communication unit in Oman
- Hilco plans sale of seafood unit equipment
- Alessa unveils Qatar expansion plans
- Intermetal to build $20m furniture factory in Dubai