Fertilizer Demand to Remain Stable as Global Agricultural Economy Slowly Recovers
In the second half of 2013, the global economy began to recover, and the average global capacity growth rate is expected to reach 4%, with uncertain factors including fiscal and debt adjustment issues in developed countries, deflation risks, and political tensions in the Middle East and the Ukraine region. Overall, favorable climate conditions and the development of agricultural science and technology in 2014 caused global grain prices to continue rising. Grain and oil crop output grew steadily. At present, all regions of the world advocate the application of multi-element fertilizers, and new-type fertilizers are developing rapidly, continuously meeting the needs of modern agriculture. The "2014-2018 Fertilizer Outlook" released by IFA in June 2014 pointed out that global fertilizer demand will steadily recover in 2014-2015, and global fertilizer consumption in 2014 is expected to increase by 3.1%; nitrogen fertilizer demand will grow by 3.1%, reaching 1.1221 tons; phosphate fertilizer demand will rise slightly, by 1.4%, reaching 41.7 million tons; while the trade volume of potash fertilizer grew by 5.3%, with an increase of 30.2 million tons. Except for Oceania, fertilizer use will increase in all regions of the world, with demand growth accelerating in North America, Latin America, and Africa, and growth rates in South Asia and East Asia exceeding 3%. Global fertilizer demand is expected to reach 200 million tons by 2018. From the perspective of fertilizer types, over the next 5 years, nitrogen fertilizer demand will gradually slow, while phosphate and potash fertilizer demand will continue to grow.
New Characteristics of Future Fertilizer Development
The input and use of new capacity will have a positive effect on the world fertilizer economy. Over the next 5 years, nearly 200 expansion projects will be put into production globally, and global fertilizer product and raw material capacity is expected to increase by 146 million tons, an increase of nearly 13% compared with 2013. In addition to new projects, the future development of fertilizers will be characterized by combining imported raw materials with demand regions. At present, export regions and import regions have already shown clear polarization, and the optimization of logistics and utilization of resources are guiding the fertilizer industry toward vertical and horizontal integration, thereby achieving global resource sharing.
The direction of fertilizer development is also affected by policies and subsidies, such as fertilizer subsidy policies and nutrient management mechanisms in South Asia and Africa. Over the next 5 years, India's fertilizer subsidy mechanism will shift toward balanced fertilization, and the number of countries implementing fertilizer subsidy policies in Africa and other places will begin to increase. Effective and efficient fertilization is beginning to become the goal of fertilizer policy in more and more countries, and all of this will change the future supply pattern of fertilizers.
Nitrogen Fertilizer Demand Weakens While Phosphate and Potash Keep Growing
At the recent IFA Fertilizer Production and International Trade Conference, experts predicted that synthetic ammonia will increase by 16% in 2018 compared with 2013, reaching 245 million tons, with new capacity concentrated in East Asia (China, Indonesia), Africa (Algeria, Egypt, Nigeria), the Middle East (Saudi Arabia, Iran), and Latin America. Over the next 5 years, global urea capacity is expected to increase by 41 million tons, reaching 245 million tons, with East Asia growing fastest at 35%, followed by Africa and North America. Urea demand will reach 203 million tons in 2018, with urea demand in East Asia, South Asia, and Latin America maintaining growth. Supply growth and stable demand will lead to an increase in surplus, and various countries also advocate reducing urea use and increasing the proportion of multi-element fertilizers.
Global phosphate rock will increase by 18% in 2018 compared with 2013, reaching 258 million tons. Phosphate fertilizer capacity will reach 52 million tons in 2018, with demand at 47.71 million tons, representing stable development. Over the next 5 years, about 22 new capacity projects will be put into production, 7 of which are in China.
Potash fertilizer capacity is expected to grow from 50 million tons in 2013 to 60.7 million tons in 2018, mainly concentrated in Canada and Russia. From 2013 to 2018, the potash fertilizer demand growth rate will be 3%, and starting in 2017, oversupply will intensify. Over the next 5 years, the potash fertilizer overcapacity situation will stabilize, with a surplus of around 10 million tons, expanding to 11.5 million tons in 2018.