Published February 2012
The industrial phosphate market is a small but important segment of total phosphate demand and accounts for around 6–8% of global phosphate consumption. The fertilizer and feed markets are the major outlets for the phosphate market. Detergents, which used to be the largest end use for industrial phosphates, have been affected by environmental pressure and have declined significantly. Producers are focusing on creating new markets in food and horticultural applications to counter the decrease in demand from the detergent industry. Another new developmental area is in the production of lithium ion–phosphate batteries, and that would depend on growth in the production of electric vehicles.
The industrial phosphates market was influenced to a large extent by a dramatic rise in raw material prices, especially during 2008–2009. The price of purified phosphoric acid increased dramatically as the result of an increase in the price of phosphate rock, the raw material used for producing the acid. Phosphate rock prices escalated fourfold in 2008. That, coupled with the spike in sulfur prices caused by a supply shortage, along with increasing utility costs, increased the price of phosphate products enormously. Traditionally, phosphate rock producers sold the product at relatively lower prices and value was added by the producer of downstream products. This trend has shifted suddenly, and the maximum value generation has been moved to the phosphate rock producers.
The following pie chart shows consumption of industrial phosphates by major region:
Consumption fell in 2009 as a result of the global demand downturn for purified phosphoric acid used to produce industrial phosphates. It has since increased to preslowdown levels. In general, the current status of the global phosphate market seems to be somewhat tight, as planned expansions have been delayed and there have been other plant closures. Operating rates are projected to be at high levels in the near future. After 2012, when supply from Ma'aden (Saudi Arabia) increases along with new supply from Morocco, the market is expected to ease. If current demand continues to persist, it could offset the new supply in the future.
Industrial phosphates are growing faster in developing markets such as Latin America and Asia, where demand for convenience foods and beverages, ready-to-use baking mixes, packaged meat, and seafood products is increasing as a result of the increasing number of middle class consumers.
Overall growth is expected to continue on a global scale in line with GDP growth. In Europe, Japan and the United States, a decrease in the detergent segment and moderate growth in other applications is expected, whereas for China, South America, the Middle East and India, growth is expected to be healthy, driven by increasing use of phosphate-based detergents.