Phosphates Fertilizer Market and Price Analysis

The phosphate industry has changed significantly over the last 20 years, with the key driver for change being the availability of commercially viable phosphate resources. Significant investment in China, Morocco, Saudi Arabia and Russia has increased production and exports from these countries, such that they now account for 75% of global DAP and MAP exports. China has moved from being a net importer of phosphate to a net exporter, and the United States has moved in the opposite direction. China, Brazil, India and the United States are the four largest consuming markets, accounting for over 60% of phosphate demand. As China and the US remain major production hubs, Brazil and India have emerged as the two key markets for imports, for both phosphate fertilizers and raw materials, and therefore generating vital spot and contract information for the purposes of price setting.

With only but a few players exerting huge influence, the impact of sharp developments in any of these is easily magnified on a global scale. Mainland China’s temporary retreat from export markets from Q4 2021 (which followed a sharp supply shock in Q1 2021 in Hubei province, caused by the early emergence of the Covid-19 pandemic), Russia’s consequent cap on exports, the imposition of countervailing duties in the United States against Russian and Moroccan phosphate fertilizers, or India’s seemingly bottomless support to domestic production all resulted in continued price hikes during 2021.

All the while, the hopes of junior miners and project activity overall are reviving – partly hoping that a need to diversify fertilizer supply will be eventually financed. Emerging demand from sectors such as automotive vehicles (for lithium iron phosphate – LFP – production) could also support further capacity growth.