CEH Report

Table of Contents

Abstract

Phosphoric acid is the leading inorganic acid produced and consumed in terms of production value and it is the second-largest in terms of volume—after sulfuric acid. By far its greatest use is in the manufacture of phosphate chemicals consumed primarily as carriers of phosphorus values in fertilizers. Use in the production of animal feeds is of secondary importance. Phosphoric acid is also used in the manufacture of phosphate chemicals for use in water treatment and detergent builders, dentifrices, fire control chemicals and a host of smaller markets. Consumption of phosphoric acid for its acid properties is relatively small (e.g., treatment of metal surfaces, beverage acidulation). Phosphoric acid is the leading intermediate product or processing step between phosphate rock and the end markets for phosphorus in phosphate form.

After many years of sustained growth, global demand for phosphate fertilizers declined significantly in 2008 and 2009. The reduction in demand was caused by tremendous price increases for phosphoric acid, which most importantly decreased fertilizer demand, but also negatively impacted consumption in other consuming areas. Fertilizer prices had increased to the extent that farmers' production costs for soybeans, wheat and maize were pushed past break-even points, despite increasing prices for agricultural goods in the same period. In addition to high feedstock prices, phosphate fertilizer prices were pushed by low carryover stocks, depreciation of the U.S. dollar, and restriction of Chinese DAP/MAP and phosphate rock exports. The price increase of phosphoric acid was driven by the increase in sulfur price, and accordingly in sulfuric acid price.

The following pie chart shows world consumption of wet-process phosphoric acid:

The primary market for wet phosphoric acid is the production of the phosphate fertilizer products ammonium phosphates and triple superphosphate. Fertilizer production accounts for an estimated 80–85% of the global market for wet phosphoric acid. The remainder is consumed in a variety of industrial applications.

The mid- to long-term outlook for the phosphoric acid market is positive. Prices began to decrease by the end of 2008 and throughout 2009, and led to increasing consumption, in particular in the agricultural segment, where soils suffer from low phosphate concentrations after a period of low phosphate use. The fundamental data in the agricultural industry are also in favor of a growing market in the forecast period, including the following factors:

• World population continues to grow.
• Arable land continues to grow globally.
• Arable land per person continues to decrease globally, which necessitates increased productivity per unit area, and increasing use of fertilizers.