Salt: Compass Minerals reports lower salt sales volumes but higher selling prices in 3Q 2020

Compass Minerals reported its Q3 2020 salt revenues to be US$141.3M, an 11% decline from prior-year results. Salt sales volumes fell 13% but average selling prices rose by 1%. Lower pre-season demand for de-icing salt in North America was the driver of the reduction in sales volumes compared to Q3 2019. This was partially offset by y-o-y increases in de-icing sales in the UK, plus sales to chemical producers in North America. Average selling prices were up because of an 8% increase in consumer and industrial average sales prices compared to 2019, which followed rises for the company’s non-de-icing products.

By the end of the North American highway de-icing bid season, Compass Minerals’ bid volumes were up 4% compared to prior-bid season results, but average awarded bid prices fell by 11%. This followed two consecutive seasons of bid price increases of 8% and 18%. Compass Minerals has reduced its expected 2020 salt sales volumes outlook to 10.5-10.8Mt because of lower-than-expected awarded bid volumes, but its revenue and EBITDA expectations remain near prior guidance levels.

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The North American de-icing market for the upcoming 2020/2021 winter has been highly competitive following reduced bid levels after the mild 2019/2020 winter and resulting high stock levels. In common with other regional salt producers, Compass Minerals has seen a rise in prices for non-de-icing products, especially in the consumer market as COVID-19 led to greater home consumption of table salt.

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This article was written by David McNeill. Please get in touch below if you wish to discuss further:

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