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Phosphate Outlook
Tim MizunoManager, Market Research
PotashCorp
PotashCorp.com
November 2015
Phosphate
TFI Fertilizer
Outlook
This presentation contains “forward-looking statements" (within the meaning of the US Private Securities Litigation Reform Act of 1995) or
“forward-looking information”(within the meaning of appropriate Canadian securities legislation) that relate to future events or our future
performance. These statements can be identified by expressions of belief, expectation or intention, as well as those statements that are not
historical fact. These statements often contain words such as “should,” “could,” “expect,” “may,”“anticipate,” “believe,” “intend,” “estimates,”
“plans” and similar expressions. These statements are based on certain factors and assumptions as set forth in this document, including
with respect to: foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities, and
effective tax rates. While we consider these factors and assumptions to be reasonable based on information currently available, they may
prove to be incorrect. Forward-looking statements are subject to risks and uncertainties that are difficult to predict. The results or events set
forth in forward-looking statements may differ materially from actual results or events. Several factors could cause actual results or events
to differ materially from those expressed in forward-looking statements including, but not limited to, the following: variations from our
assumptions with respect to foreign exchange rates, expected growth, results of operations, performance, business prospects and
opportunities, and effective tax rates; fluctuations in supply and demand in the fertilizer, sulfur, transportation and petrochemical markets;
changes in competitive pressures, including pricing pressures; costs and availability of transportation and distribution for our raw materials
and products, including railcars and ocean freight; risks and uncertainties related to operating and workforce changes made in response to
our industry and the markets we serve, including mine and inventory shutdowns; risks and uncertainties related to our international
operations and assets; failure to prevent or respond to a major safety incident; adverse or uncertain economic conditions and changes in
credit and financial markets; the results of sales contract negotiations within major markets; economic and political uncertainty around the
world; risks associated with natural gas and other hedging activities; changes in capital markets; unexpected or adverse weather
conditions; catastrophic events or malicious acts, including terrorism; changes in currency and exchange rates; imprecision in reserve
estimates; adverse developments in new and pending legal proceedings or government investigations; our prospects to reinvest capital in
strategic opportunities and acquisitions; our ownership of non-controlling equity interests in other companies; the impact of further
technological innovation; increases in the price or reduced availability of the raw materials that we use; security risks related to our
information technology systems; strikes or other forms of work stoppage or slowdowns; timing and impact of capital expenditures; rates of
return on, and the risks associated with, our investments and capital expenditures; changes in, and the effects of, government policies and
regulations; certain complications that may arise in our mining process, including water inflows; our ability to attract, retain, develop and
engage skilled employees; risks related to reputational loss; earnings; and the decisions of taxing authorities, which could affect our
effective tax rates. These risks and uncertainties are discussed in more detail under the headings “Risk Factors” and “Management’s
Discussion and Analysis of Results and Operations and Financial Condition” in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2014 and in other documents and reports subsequently filed by us with the US Securities and Exchange Commission and
the Canadian provincial securities commissions. Forward-looking statements are given only as of the date hereof and we disclaim any
obligation to update or revise any forward-looking statements in this release, whether as a result of new information, future events or
otherwise, except as required by law.
Forward-looking Statements
1. Macroeconomic factors affecting agriculture and fertilizer markets
2. Global phosphate demand and trade remain at healthy levels
3. Expect a relatively balanced market over the medium term
Executive Summary
Source: IMF, Bloomberg
2015 vs. 3-Yr Avg. (% Change)
Crop Price Change
2015 vs. 3-Yr Avg. (% Change)
FX Change
-5.0%
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
2015F vs. 3-Yr Avg. (% Change)
Regional GDP Growth Rate
Change in Economic Conditions Create Near-term Headwinds
Economic Factors
-90%
-80%
-70%
-60%
-50%
-40%
-30%
-20%
-10%
0%
-40%
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
0
20
40
60
80
100
120
140
160
180
200
0
400
800
1,200
1,600
2,000
2,400
2,800
1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015F
Nitrogen Phosphate Potash Crop Production
2015F refers to the 2015/16 crop year. Stacked bars represent fertilizer consumption by nutrient.
World fertilizer consumption CAGR of approximately 2.0%.
Million Tonnes (Crop Production)
Steady Growth in Crop Production a Key Driver of Fertilizer Demand
World Crop Production and Fertilizer Consumption
Source: USDA, CRU, Fertecon
Million Tonnes (Fertilizer Use)
0
50
100
150
200
250
300
350
400
450 Crop Price Index* Fertilizer Price Index**
* Based on corn, soybean and wheat prices (weighted by global consumption).
** Based on urea, DAP and KCl prices (weighted by global consumption).
Price Index (2005 Average = 100)
Crop and Fertilizer Price Index
Fertilizer Remains Affordable Despite Lower Crop Prices
Source: Bloomberg
Phosphate – Near-term
Developments
-8
-6
-4
-2
0
2
4
6
8
10
Transition to Major Phosphate Exporter
China DAP/MAP Net Exports
Source: CRU, PotashCorp
Million Tonnes
Source: Katana, FAI, CRU, PotashCorp
Million Tonnes Million Tonnes P2O5
Tight Inventory and Good Demand Drive Robust Imports
India’s Phosphate Imports
Cumulative Phosphoric Acid Imports Cumulative DAP Imports
0
1
2
3
4
5
6 2014 2015F 3-Yr Average
0.0
0.5
1.0
1.5
2.0 2014 2015F 3-Yr Average
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2014 2015F 3-Yr Average
Imports Trail Previous Year Record, Inventories Tightening
Brazil Cumulative DAP/MAP Imports
Source: ANDA, CRU
Million Tonnes
Source: TFI, CRU, PotashCorp
Percentage
Percentage
Imports and Specialty Phosphates Have Gained Greater Share of Market
US Phosphate Fertilizer Consumption
2010 2015F
4%
83%
6%
6%
Liquid US DAP/MAP
Imports Specialty Phosphate
4%
75%
11%
10%
Liquid US DAP/MAP
Imports Specialty Phosphate
Source: CRU, TFI, PotashCorp
Million Tonnes
Million Tonnes
Reduction in Exports; Strong Seasonal Imports
US DAP/MAP Trade
US DAP/MAP Exports US DAP/MAP Imports
0.0
0.5
1.0
1.5
2.0
05 06 07 08 09 10 11 12 13 14 15F
1st Half 2nd Half
0
2
4
6
8
10
05 06 07 08 09 10 11 12 13 14 15F
1st Half 2nd Half
Source: CRU, PotashCorp
* Accounts for 47% of global phosphoric acid production (excludes China)
0
1
2
3
4
5
6
7
8
9
US Morocco FSU Middle East Other Africa Europe
2015F Previous 5-Yr Maximum
Million Tonnes P2O5
Plant Closures and Operational Issues Have Balanced Market
Phosphoric Acid Production Profile*
Phosphate – The
Outlook
0
10
20
30
40
50
60
70
80
Million Tonnes
0%
10%
20%
30%
40%
50%
60%
70%
80%
Percentage of Total World Reserves*
Morocco Has the Largest Rock Reserves
World Phosphate Rock Profile
Phosphate Rock Reserve Phosphate Rock Production
Source: US Geological Survey, CRU
* Reserves as defined by the US Geological Survey.
Source: CRU, Fertecon, PotashCorp
257
275
245
250
255
260
265
270
275
280
Million Tonnes*
Majority of Expected Capacity Developed in Morocco, Saudi Arabia and South America
New Global Phosphate Rock Capacity
* Based on nameplate capacity
Capacity increase
equivalent to
approximately 9.5
million mt DAP
Source: CRU, PotashCorp, Industry Filings
Million Tonnes P2O5
Share of Global Producers Are Non-Integrated Regionally Significant
World Phosphoric Acid Capacity Profile
0
5
10
15
20
25 Purchased Rock Integrated Rock
-1.5
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2010 2012 2014 2016F 2018F 2020F
Morocco China Saudi Arabia Jordan Brazil Others Closures
Million Tonnes P2O5
Majority of Expected Capacity Developed in Morocco, Saudi Arabia and South America
World Phosphoric Acid Capacity Additions
Source: CRU, IFA, PotashCorp
*Estimated annual achievable production level from existing operations and projected new capacity.
50
60
70
80
90
100
0
10
20
30
40
50
60
2006 2008 2010 2012 2014 2016F 2018F 2020F
Demand Operational Capability* Operating Rate
Operating Rate – Percent Product - Million Tonnes P2O5
Expect Relatively Balanced Supply/Demand in the Medium Term
World Phosphoric Acid Supply and Demand
Source: CRU, IFA, PotashCorp
Source: CRU, PotashCorp
Million Tonnes
Expect Growth in Global Trade; India Key Market to Watch
World DAP/MAP Imports
0
5
10
15
20
25
30
2005 2010 2015F 2020F
India Brazil Other Asia Other LA US Others
Source: CRU, PotashCorp
Million Tonnes
Expect Majority of Export Growth From Morocco and Saudi Arabia
World DAP/MAP Exports
0
5
10
15
20
25
30
2005 2010 2015F 2020F
Morocco Saudi Arabia China Russia US Other
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