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2009-6-3 09:24:00 a.m. HKT, XFNA
DJ MARKET TALK: Caz Bullish On Potash Plays In Mar Report
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| 0855 [Dow Jones] For Chinese fertilizer sector's 2H outlook, Cazenove Asia is bullish on potash, but neutral on urea, nitrogen, phosphate. Notes global urea, phosphate prices plunged, while potash prices held up "quite well," with better supply-demand dynamics. Tips avoiding methanol exposure; "Methanol is being crushed by cheap natural gas overseas, low shipping costs, weak demand and rising supply, and we see no end in sight." Notes urea price recovery in last few weeks on buoyant demand, but tips rally may not last as coal prices drop, marginal producers return to production. Says likes Sinofert (0297.HK) for more secure 2009E earnings, with catalysts including further M&A, potash price talks. Notes uncertainly on China BlueChemical (3983.HK) earnings, as current methanol prices unprofitable. Says neutral on Yanzhou Coal (1171.HK) due to methanol earnings decline. Adds, for ex-methanol feedstock sector, prefers Shenhua (1088.HK), PetroChina (0857.HK). (LES) Contact us in Hong Kong. 852 2802 7002; MarketTalk@dowjones.com
(Delayed by 1 hour)
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