The company, which supplies to some of the world's biggest miners, said the majority of the effects of its re-pricing strategy had been felt, but UBS is concerned risks to its ammonium nitrate prices beyond this year are firmly tilted to the downside.

"Excess supply remains a key headwind, alongside weaker demand, in Orica's largest markets in Australia and North America, and is expected to get worse as new manufacturing capacity is added in both regions," analyst Ramoun Lazar said.

It comes after Orica chief executive Alberto Calderon said too much uncertainty remained in the deteriorating mining industry to forecast a bottom in the commodity cycle downturn, despite commodity prices including iron ore rallying through March and April.

Macquarie Bank warns the question for investors is whether Orica's earnings have bottomed or if downgrades will persist, with the broker arguing the latter is more likely.

"In our experience the downgrade cycle is longer and deeper than you think," Macquarie said.

"This proved to be the case with Orica's heavily caveated guidance for growth downgraded. While the base is now lower, investors are still facing the same question as six months ago. We still think the answer is the same – downside risk persists."

UBS believes the medium-term outlook for Orica remains "challenged", tipping just 1 per cent EPS growth on average for the company for 2017 through to 2020.

Mr Lazar kept his sell rating on the stock, noting the tough environment for the US coal industry. He reduced the price target from $13 to $12.

"While management is outperforming on costs, we believe Orica needs to run hard to stand still in the current environment," he said.

Macquarie maintained its underperform rating, and has cut its target price from $15.11 to $13.66.