Production halted to realise stockpile value as revenues slide.

Despite higher average salt prices up 9% year on year, Compass Minerals saw a 14% decrease in revenue year on year on lower sales volumes, the company announced in its recent Q2 report. This was mainly down to mild winter weather across North American markets as well as a decline in consumer and industrial markets.

As a result, production has been curtailed at the company’s Goderich mine in Ontario, Canada which has a capacity of 7.25Mtpy rock salt. The aim behind the curtailment is to substantially reduce inventory levels in the coming de-icing season, to realise the locked-up value. As part of this approximately 22% of the mine’s represented workforce has been temporarily laid off. The company is aiming to improve sustainability and cost efficiencies through an advanced mine plan. The curtailment is being carried out so that in the future there will be flexibility in production levels and the ability to optimise production and operating schedules. This is going hand in hand with restructuring in selling, general and administrative costs, with a recent headcount reduction.

Q2 salt sales into highway deicing fell from 3.915M st in Q2 2023 to 3.045M st in Q2 2024, a 22% fall. Meanwhile, salt volumes sold into consumer and industrial markets fell from 488k st in 2023 to 421k st in 2024 in Q2. Overall the company expects salt volumes to be between 9.2 and 9.4M st in 2024.