The global phosphate market has been on a relatively firm footing over the past few years as demand for fertilizers has been strong on the back of concerns over 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 will likely be impacted by new production capacity coming on stream.
The Ma’aden Phosphate Plant, with a capacity of 3m tonnes/year of DAP, started up in 2011, but is expected to reach full capacity by the end of 2012. Meanwhile, Moroccan producer OCP is planning to build four new 1m tonne/year DAP/MAP units in 2013-2015.
The Chinese government’s export policy could also impact the supply side. Currently, China adopts a low and high export tax window, which only makes DAP exports viable in June-September, but this could be subject to change in the coming years if China looks to keep more supply for the domestic market.
Updated to mid-August 2012