- Fertilizers make up the majority chunk of global phosphate production, with demand for phosphorous fertilizers primarily driven by high consumption levels in developing and large populous countries such as India, China, Brazil, Indonesia, Mexico and Argentina due to greater food requirements.
- Consumption of phosphorous fertilizers is decreasing in developed nations including the U.S., Europe, and Japan, due to increasing shift towards more eco-friendly agricultural production.
Consumption of phosphates, to a large extent, depends on seasonal weather patterns and regulations governing the usage. Growth in the global market is expected to stem largely from the developing countries of Asia-Pacific, Latin America and Middle East. With relatively high usage of phosphates in fertilizers and detergents in Asia-Pacific and Latin America, the regions are poised to remain the pioneers for the phosphates market in the foreseeable future.
China is the world's largest phosphate rock producer, with production volume nearing 55 million tons in 2009, followed by the US as the next largest producing country. Morocco and Western Sahara, Russia, Tunisia, Jordan and Brazil comprise some of the other leading phosphate rock producers on a global scale. Lack of stringent regulatory restrictions offers ample growth opportunities in these markets.
On the other hand, usage of phosphates in detergents is witnessing a diminishing trend in developed markets such as North America and Europe, owing to environmental hazards such as eutrophication and algal bloom in waterways. The global phosphoric acid market is presently staring at a crucial demand-supply imbalance, wherein production levels far exceed the actual demand. Similar to the situation in 2006, the global economic downturn in 2008-09 prompted a virtual collapse of fertilizer demand, amidst high supply levels.
Fertilizers make up the majority chunk of global phosphate production, with demand for phosphorous fertilizers primarily driven by high consumption levels in developing and large populous countries such as India, China, Brazil, Indonesia, Mexico and Argentina due to greater food requirements. However, consumption of phosphorous fertilizers is decreasing in developed nations including the U.S., Europe, and Japan, due to increasing shift towards more eco-friendly agricultural production.
Detergents make up the second biggest end-use market for phosphates after fertilizers. However, phosphate consumption in detergents is on a downward spiral due to concerns over its role in pollution of waterways. Phosphate-based detergents have been seriously impacted by stringent regulatory norms, mainly in developed regions of European Union and North America. Use of phosphate in detergents is almost phased out in many European countries and several states in the U.S.
Another major area of concern that could have a grave implication for the future prospects of phosphates is the fast depletion of phosphate rock reserves globally. Even though reserves are found in many countries, recoverable resources are located only in China, U.S. and Morocco. Judging by the current rates of extraction, reserves of phosphate rock in the U.S. will deplete in the next 30 years, while global reserves will last only for a maximum period of 100 years.
The worldwide economic downturn that surfaced in 2008 had an adverse impact on demand and ultimately the production of phosphates in 2009, with major miners cutting down on production and even closing plants permanently. The financial crisis adversely affected the purchasing power of farmers, resulting in substantial decrease in fertilizer prices, such as that of MAP and DAP, which fell by a substantial 75% in 2009 vis-à-vis 2008 price levels. The severe demand crunch and excess inventory stockpiles further worsened the situation. In order to minimize inventories, fertilizer companies, specifically non-integrated producers with lower margins and higher costs cut down on production capacities.
Price of Phosphates recorded at US$1200/ton in 2008, witnessed a major slump to US$300/ton in 2009. In the midst of the economic crisis, only two regions, Central and South Asia and Eastern Europe witnessed increase in fertilizer consumption, while Africa remained at a stable level. Production of fertilizers, in sharp contrast to the consumption pattern, continued to display a northward trend even through the recession period, spurred by capacity expansions and new plant installations.
Asia-Pacific driven by China, India, Australia, Vietnam and Sri Lanka reigns as the single largest regional market, as stated by the new market research report on Phosphates. Latin America, Europe and the US are the other significant phosphate markets worldwide. In terms of growth rate, Asia-Pacific is poised to display the highest CAGR of 3.8% through 2015. The Fertilizers market constitutes the largest end-user of phosphates. The segment is also projected to sail ahead at the fastest CAGR of 3.0% through 2015.
Key market participants in the report include Agrium Inc, CF Industries Inc, CJSC PhosAgro AG, EuroChem Mineral and Chemical Company, ICL Group Ltd, Innophos Inc, JSC Acron, Office Cherifien des Phosphates, PotashCorp, Prayon Group, Phosagro Group, Rhodia Novecare, Sichuan Chuanxi Xingda Chemical Co. Ltd, and The Mosaic Company.
The research report titled "Phosphates: A Global Strategic Business Report" announced by Global Industry Analysts, Inc., provides comprehensive market overview, trends & issues, end-use market analysis, technological developments, recent industry activity and profiles of market players worldwide. Analysis and overview is provided for major geographic markets such as U.S., Canada, Japan, Europe, Asia-Pacific, Latin America and Rest of World. Market analytics are provided in terms of thousand metric tons for end-use segments including Fertilizers, Animal Nutrition and Others (detergents, food & beverages and flame retardants). The study also provides historic data for an insight into market evolution over the period 2000 through 2006.
For more details about this comprehensive market research report, please visit http://www.strategyr.com/Phosphates_Market_Report.asp.