The global phosphate market has been on a relatively firm footing during the past few years as demand for fertilizers has been strong on the back of concerns about food security, and a growing demand for crops as fuel. Strong feedstock ammonia and sulphur prices have also kept prices firm.
The growth in fertilizer, and therefore phosphates demand, looks set to continue. However, the supply side is likely to be affected by new production capacity coming on stream.
The 3m tonne/year Ma’aden Phosphate Plant in Saudi Arabia was started up in 2011 and is expected to produce 2.0m-2.5m tonnes in 2013 before reaching full capacity in 2014. Meanwhile, Moroccan producer OCP is planning to build four new 1m tonne/year units between 2013 and 2015.
Chinese export policy can also affect the supply side. Currently, China adopts a low and high export tax window that makes exports viable only for a certain period of the year. For 2013, the window has been extended by a month and will run from mid-May to mid-October and may mean more exports from China this year.
Updated to mid-May 2013