China has secured very low prices for the fertilizer potash from Belarusian Potash Co, Bloomberg reported, citing sources familiar with the deal. China will take delivery of 1 million tons of potash in 2010 at US$350 a metric ton including freight costs, which analysts said was US$50 below current market prices. Prices for the fertilizer reached highs of US$1,000 per ton in 2008, when China consumer 22% of the world’s production, but the economic crisis sharply reduced demand. Belarusian Potash represents Russian and Belarusian producers. China’s success in securing below-market rates for potash – with demand expected to increase next year – stands in stark contrast to the stalemate in 2009 iron ore negotiations. Those negotiations produced no contracts, forcing steel makers to buy raw materials from the spot market.
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