GPCA: New capacities will serve growing global fertilizer markets

12 September 2012 10:57  [Source: ICB]

Phosphate is one of the three key nutrients required for plant growth (along with nitrogen and potassium). Global phosphate fertilizer consumption continued to be firm in 2011, surpassing 40m tonnes, measured as phosphorus oxide (P2O5).

Fertilizer Rex Features

Rex Features

 China has seen a noticeable increase in the production of fertilizers

Demand for fertilizers is relatively inelastic, as a minimum amount of food has to be consumed regardless of its price, although demand has also been boosted by an increase in the volume of crops grown for fuel in recent years.

Diammonium phosphate (DAP) is the most widely used phosphate fertilizer, accounting for nearly 40% of global phosphate fertilizer consumption. Current and future DAP consumption is driven by improved GDP per capita and rising living standards in India and China.

India is the largest consumer of DAP fertilizers and in 2011 accounted for around 35% of global demand, followed by China with 25%. The global consumption of DAP in 2011 is estimated to be over 34m tonnes.

Global consumption of mono-ammonium phosphate (MAP) is estimated at 22m tonnes in 2011. China is the largest consumer and accounted for around 47% of global demand, followed by North America with 20%. South America is the third-largest consumer of MAP and accounted for 17 of global consumption in 2010, led by Brazil.

Asia is the leading region for granulated nitrogen phosphorus potassium (NPK) fertilizer demand, accounting for 50% of global consumption. Global NPK consumption was affected by the 2008 price hikes, but has recovered gradually since, with an estimated consumption of 23m tonnes in 2011.

DAP demand chartThe global consumption of triple superphosphate (TSP) was 6.2m tonnes in 2011. South America is the largest consuming region, recording 36% of the total consumption, followed by Asia-Pacific with 26%. The Middle East also weighs in with a significant portion, consuming 21% of global demand in 2011.

One peculiarity of phosphate fertilizer capacity is its flexibility, whereby more than one type of fertilizer can be produced in the same facility; for example, slurry granulation processes are capable of producing DAP, MAP and NPK fertilizers (of varying compositions).

There are several phosphate fertilizer projects under development, particularly in Asia, Latin America, North Africa and the Middle East.

In both China and India, there has been a noticeable increase in production of DAP, MAP and granular NPKs. The bulk of TSP capacity addition in the near term will come from South America, with nearly 1.3m tonnes/year of new capacity expected in Brazil alone. New phosphate fertilizer capacity is also expected in central Asia in the longer term, where vast reserves of phosphate rock and potash can be found.

In the Middle East, Ma'aden Phosphate brought on stream a 3m tonnes/year DAP plant in 2011 as part of its Phase I development. Completion of Phase II and III will see DAP capacity increase by 2m tonnes/year.

Due to the slow growth rate of TSP demand, low operating rates and migration to nitrogenous and ammonium phosphates, Nexant does not forecast any additional TSP capacity prior to 2015.

  • Dr Eduard Lindner is a senior consultant at Nexant and the author of its "Phosphate and NPK Fertilizers" PERP report.

Author: Eduard Lindner

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