The global fertilizers market, particularly in phosphate and boron, faces challenges and opportunities. Phosphate supply disruptions are looming due to mineral deposits’ dependency, mitigated partially by emerging alternative sources. Also, major mining players’ entry into the potassium market adds competitiveness but maintains the supply-demand balance.
As per Inkwood Research, the global phosphate fertilizer market is expected to record a CAGR of 4.65% during the forecast period, 2023-2032, while the global boron fertilizer market is set to register a CAGR of 7.76% during the same period.
Further, regulatory shifts towards decarbonization propel green and blue ammonia production, buoyed by initiatives like the EU’s Green Deal and the US’s IRA. As these ammonia types become cost-competitive, their versatility beyond fertilizers, such as in electricity generation and decarbonized shipping, present promising avenues for market expansion and sustainability.
This blog explores the latest trends in the global phosphate fertilizer market.
Global Fertilizers Market: The Phosphate Fertilizer Trends
- Growing Production of Green Ammonia
Currently, fertilizer companies function as integrated ammonia and fertilizer producers, converting ammonia primarily for captive uses like urea and nitrates. The volumes of ammonia traded in merchant markets are relatively small and mainly for industrial purposes such as explosives. However, by 2050, the merchant market is expected to surpass captive uses, with companies treating ammonia more like a commodity.
Consequently, as the equilibrium between demand and supply becomes increasingly unstable, price volatility will rise, partly due to the substantial investments and lengthy timelines required to establish the supply-side infrastructure for green ammonia and develop necessary demand-side infrastructure like power plants and ship vessel fleets equipped with ammonia-fueled engines.
The extent to which fertilizer companies can capitalize on these shifts hinges on the interconnected dynamics of the fertilizer, ammonia, and hydrogen markets in the years ahead. On the one hand, the significant ammonia production by energy companies could exert pressure on fertilizer prices, at least temporarily. In such a scenario, the supply buildup of green hydrogen and green ammonia might outpace the growth in demand for maritime uses and energy infrastructure. Nonetheless, farmers could benefit from cheaper nitrogen fertilizers.
Conversely, the emergence of new ammonia applications could prove advantageous for fertilizer companies producing their own green and blue ammonia, especially if demand for green ammonia temporarily exceeds supply and commands higher prices for these applications compared to fertilizer products. However, in this situation, farmers might encounter sharp increases in fertilizer prices.
Accordingly, engaging actively in green ammonia production and exploring new ammonia applications presents fertilizer players with the opportunity to diversify away from the cyclical agriculture industry, fostering growth even as agricultural demand contracts.
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- MAIRE’s New Fertilizer Project in Africa
Stamicarbon, the nitrogen technology licensor of the MAIRE Group, continues to strengthen its presence in Sub-Saharan Africa. Stamicarbon has secured a second license contract for a plant with identical capacity and design for the same customer. This comes after the procurement of license and process design package (PDP) contracts in 2022 for the design of a 4000 MTPD melt and granulation plant.
The world-scale integrated ammonia and urea complex in Sub-Saharan Africa will boast a capacity of 4,600 MTPD of ammonia and 8,000 MTPD of urea across two production trains. This grassroots project, slated for operational status in 2026, aims to meet the increasing demand for high-quality fertilizers in the region and globally, accredited to the plant’s strategic location.
The advanced urea plants will incorporate Stamicarbon’s proven pool condenser with MP Flash design, resulting in significant reductions in energy consumption. Additionally, the granulation plant will employ Stamicarbon’s fluid bed granulation technology. The plant’s design includes an integrated off-gase acidic scrubbing system to minimize ammonia emissions and salt reworking technology, an innovative concept that eliminates wastewater streams. The high-pressure equipment for both synthesis sections will be constructed using super durable duplex stainless steel Safurex®. (Source)
Global Fertilizers Market: Future Prospects of Phosphorous
Phosphorus fertilizer is necessary for modern food production and is the limiting factor in crop yield. As the world’s population steadily grows, food production will thus have to increase as well to meet the needs. The consequence followed is the elevated demand for phosphorus fertilizer.
While global phosphorus and potassium supplies rely on mineral deposits, they remain unaffected by technological shifts. Although alternative phosphorus sources from waste stream recovery may contribute locally, they are unlikely to significantly impact global market dynamics.
Furthermore, growing regulatory stringency and decarbonization objectives are driving future production towards green and blue ammonia. Initiatives such as the EU’s Green Deal and Emission Trading System (ETS), the US’s Inflation Reduction Act (IRA), and Japan’s Hydrogen Strategy are expected to render green and blue ammonia cost-competitive, if not cheaper than gray ammonia in these markets. Such aspects define the global fertilizers market growth trajectory.
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FAQs:
- What are the main challenges facing the phosphate fertilizer market?
A: The phosphate fertilizer market grapples with potential disruptions in supply owing to its reliance on mineral deposits, compounded by limited alternative sources. However, emerging initiatives for waste stream recovery offer localized solutions. - How do regulatory changes impact the boron fertilizer market?
A: Regulatory shifts towards decarbonization, coupled with initiatives like the EU’s Green Deal and the US’s Inflation Reduction Act, are influencing the boron fertilizer market. These changes are fostering the development of greener alternatives like green and blue ammonia, potentially reshaping market dynamics and demand patterns.