Phosphate industry outlook: key questions facing the global market - Integer
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Phosphate industry outlook: key questions facing the global market

Posted On: 22-03-2018 By: Ali Asaadi

Integer Research’s Head of Phosphate and NPK, Ibi Idoniboye, looks at the key questions facing the phosphate industry – and invites you to a complimentary webinar which will address these questions in detail.

It is commonly agreed that the global phosphates market remains fundamentally weak, particularly at the downstream level.  Market oversupply (more operational capacity than is required to satisfy current demand levels) and the increasing effects of international competition have been weighing on benchmark prices and producer margins for several years.

Integer estimates global ammoniated phosphate capacity increased by 4.3 million tonnes P2O5 from 2012-2017, while IFA statistics show output remained relatively flat over the period, averaging around 28 million tpy P2O5 (thus widening the gap between supply and demand). Average realised prices fell by over US$200/tonne during this time. An additional 3 million tpy finished capacity is expected to come online between now and the end of 2019 from Morocco and Saudi Arabia (two of the world’s most competitive producing countries), increasing the likelihood of a flatter global cost curve and continued price pressure.

Webinar: Phosphate Market Outlook

Our recent conversations with industry stakeholders have thrown up several recurring themes – particularly how sustainable the current level of price support is and what key drivers to keep an eye out for in the short-mid-term.

This is covered in Integer’s Phosphate webinar that takes place 19th April 2018.

WebinarGlobalPixRegister here >> (register even if you aren’t available on the date – we’ll send you a link to the recording)

However, average finished phosphates prices have rallied at the major benchmarks since hitting the floor of US$330/tonne FOB in Q3 2017 and remain firm at the time of writing. In Q1 2018, DAP/MAP benchmarks averaged $45/tonne higher y-o-y and US$70-80/tonne higher q-o-q, despite lacklustre demand. Production costs and capacity utilisation rates are key price drivers in a competitive, supply-led market (lower production costs enable producers to accept lower realised product prices, while restricting output may support higher achieved prices via a tighter supply-demand balance) and have contributed to the recent rally:

  • Mosaic curtailed production at Plant City, Florida in October 2017, removing 1.4 million tpy finished capacity from the market
  • Social unrest in Tunisia disrupted mining and processing activities
  • Marginal producer costs in China inflating
    • Environmental stringency enforcement leading to higher domestic phosphate rock costs
    • High internal ammonia costs with the domestic nitrogen market tight and transitioning towards more LNG-based ammonia production

Is there longevity in the current price rally?

Phosphate market outlook webinar

WebinarGlobalPix

Register even if you can’t attend: We’ll send all registrants a link to the webinar recording – to watch when it suits you

  • Duration: 40 minutes (including confidential Q&A session at the end)
  • Cost: Free – this webinar is complimentary

Register for the phosphate webinar here >>

Key questions covered by the webinar:

This concise webinar will focus on supply issues:

  • What happens if/when Chinese ammonia costs fall?
  • Is there any evidence of China rationalising its phosphate industry?
  • Are higher finished phosphates prices improving margins? Who are the winners and losers?
  • How will MENA ramp-up timings effect supply-demand balance and prices?

We will also touch on demand fundamentals:

  • Will Indian DAP imports continue to shrink y-o-y?
  • Where will we see the strongest demand growth?
  • Is demand for value added P-containing nutrients growing?

More about Integer’s phosphate market coverage and analysis

Integer Research regularly and continually analyse the global phosphate market to support our quarterly phosphate market analysis service and consultancy work. As part of this process we speak to the industry, write complimentary articles, present papers – and deliver concise market outlook webinars.

Related research from Integer

The Phosphate Cost and Profit Margin Service >>

  • Phosphates-cover-Integer-research-ltdDiscover what the production costs are for each producer, what prices and margins they achieve, how these are likely to change in the future including analysis of global cost/supply curves
  • Access quarterly updates analysing market developments and highlighting evolving market dynamics
  • Incorporate quarterly data sets into your strategic decision making  
  • Uncover how much new capacity (greenfield and brownfield) – is likely to be added in the medium term


Global NPK Supply, Demand and Trade Database  >>
                                                        

  • Discover the size of the market NPK Cover
  • Gain insight into global trade flows
  • Reveal current and historical supply and demand
  • Incorporate the comprehensive datasets into your planning and use them to inform and support your decision making