Moderate fertilizer demand rise as new production comes onstream - IFA

25 September 2017 14:40 Source:ICIS News

Interview article by Sylvia Traganida

LONDON (ICIS)--Fertilizer demand is seen growing temperately in 2017, despite an increase in capacity this year with new plants coming onstream, Charlotte Hebebrand, director general of the Paris-based International Fertilizer Association (IFA) revealed on Monday.

In an interview with GPCA Insight – the official quarterly newsletter of the Gulf Petrochemicals and Chemicals Association – Hebebrand (pictured right) said that in terms of supply and demand prospects, there is a growing imbalance between increasing potential supply and moderate demand growth.

She added that quite significant new capacity additions, driven by investment decisions made four to eight years ago, are coming onstream and new capacity additions in nitrogen and potash segments are likely to increase supply/demand imbalances in the short term, notably in 2017-2018.

In the next five years, IFA anticipates world fertilizer demand to increase by 1.5% per year to reach 198m tonnes of nutrients, comprising 112m tonnes of nitrogen, 48m tonnes of phosphates and 38m tonnes of potash. Demand is expected to expand faster for potash (2.1% per year) versus phosphates (1.5% per year) and nitrogen (1.2% per year) reflecting improvements in nitrogen use efficiency and the need to rebalance fertilization in many regions.

Hebebrand, who will be speaking at the eighth GPCA Fertilizer Convention in Bahrain on 26-28 September, also talked about other issues affecting the fertilizer market.

More stringent regulatory environment is always most likely to affect the sector. In addition, increasingly volatile energy prices and competing uses of feedstock and last but not least, rising trade barriers will have consequences.

Uncertainties will still prevail about future Chinese export levels: last year (2016), Chinese exports of urea and DAP accounted for 18% and 42% of global trade respectively,” she added.

“To summarise, the industry will most likely continue to face a supply-driven market with potentially growing structural imbalances.”

The full interview with Hebebrand can be found here.

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By Sylvia Traganida