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Business

German fertilizer company K+S faces departure from DAX index

German salt and potash producer K+S has plunged into trouble as the DAX index blue chip has seen its share price plummet for days. Russia's mining firm Uralkali was reported to be behind the fall.

K+S could even face relegation from Germany's first-division DAX index after spending five years in the highest league, the "Welt" daily reported on Friday.

"If the company doesn't recover by the end of August, it's running the risk of being chucked out of the DX," Frankfurt Close Brothers Seydler Bank analyst Silke Schlünsen was quoted as saying in an interview for the newspaper.

Her comments followed a 30 percent drop in the company's share price during the trading week which had sent shockwaves through all fertilizer producers.

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The steep decline was reported to have been caused K+S' Russian rival, Uralkali, one of the world's largest potash makers accounting for one fifth of global production. The Russian competitor had said it expected potash prices to go down to $300 (227 euros) per ton from $400 at present.

Uralkali also announced it would in future distribute its products through a network of its own which would also mean more pressure on market prices.

As an added irritation, K+S investors saw themselves confronted with rumors that Indian Potash, the nation's largest importer of the substance, was in talks with the German company to renegotiate prices. K+S itself did not want to comment on that speculation.

Should K+S really have to leave the DAX, it would most likely be replaced by the wholesale and retail giant Metro.

hg/hc (AFP, dpa)

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