Phosphoric acid is a colorless, odorless, and crystalline
solid with a chemical formula of H3PO4. It is commonly used in various
industrial and agricultural applications, making it an important chemical
compound in the global market.
One of the most common applications of phosphoric acid is in
the production of fertilizers. It is an essential component in the manufacture
of phosphate fertilizers, such as ammonium phosphate and triple superphosphate,
which are used to improve soil fertility and crop yields. Additionally, it is
used as a pH adjuster in various agricultural products, including animal feed
and food preservatives.
Another significant application of phosphoric acid is in the
production of soft drinks. It is used as a flavor enhancer and acidulant in
carbonated beverages, providing a tart taste that is preferred by many
consumers. It is also used in the production of other food products, including
jams, jellies, and cheeses.
Phosphoric acid is also widely used in the production of
detergents, water treatment chemicals, and metal cleaning agents. It is a vital
component in the manufacturing of sodium tripolyphosphate, which is used in
laundry detergents to soften water and improve the effectiveness of cleaning
agents. It is also used in water treatment to control the pH of water and
prevent the formation of scale in pipes and boilers.
Furthermore, phosphoric acid is used in the production of
pharmaceuticals and other chemicals. It is used as a catalyst in the
manufacture of acetic acid, propylene oxide, and other organic compounds. It is
also used in the production of flame retardants, resins, and plastics.
Dynamics of Phosphoric Acid Market
Drivers in Phosphoric
Acid Market
The increasing global population is driving the demand for
phosphoric acid to produce fertilizers, which are required to produce crops to
meet the food demands of the growing population. According to the UN Department
of Economics & Social Affairs, the world population is predicted to reach
9.7 billion by 2050, leading to a higher demand for food and fertilizer.
Developing regions and countries are using fertilizers at a much higher rate
than emerging ones. In China, the demand for phosphate fertilizers has been
fueled by the country's rapid growth in agricultural output and economic
progress, leading to a rise in domestic production and consumption. However,
stringent government regulations are expected to moderate production growth in
China. Conversely, India is anticipated to experience significant growth in
phosphate fertilizer production and consumption due to an increase in
agricultural activities and growing fertilizer exports.
The market for phosphate fertilizers is impacted by ongoing
concerns regarding crop yield and food safety, which have led to the
development of sustainable options such as organic chemicals and
micronutrients. The development of such bio-based products has created
competition against conventional fertilizers available in the market,
potentially hindering market growth. The overuse of phosphate and
nitrogen-based synthetic products has also resulted in a shift towards
sustainable options.
Restraints in
Phosphoric Acid Market
The growth of the phosphoric acid market is hindered by environmental
concerns and increasing regulatory pressure at national, provincial, and state
levels in many regions. Government regulations, such as those set by the EPA
(Environmental Protection Agency), are related to the supply of phosphoric
acid. Certifications on quality, health, and other parameters are imposing new
rules for goods and plants, lawmakers on fertilizers, and tailings management
due to several environmental issues.
Fertilizer companies are pursuing registration of the
product due to high-standard certification schemes. The fertilizer industry
will be affected globally by the EU's Green Deal criteria, China's Regulatory
Phosphogypsum Control, and trading schemes. The environmental impact of
phosphates is limiting the growth of the fertilizer market, thereby restraining
the growth of the phosphoric acid market. The decline in arable land due to the
growing population has led to a requirement for quick growing chemicals, which
is one of the primary reasons for the increased usage of synthetic chemicals over
natural or bio-based ones.
North America's dominant agrochemical industry is home to
several fertilizer manufacturing companies, including the United States.
Opportunities in
Phosphoric Acid Market
Rare earth elements are valuable resources that have many
applications, including manufacturing catalysts, ceramics, glass, polishing,
metallurgy, and defense. The challenge in recovering these elements lies in the
fact that they are diluted in the products of the sulfuric acid process used to
remove impurities from phosphoric acid and phosphogypsum. Alternative
decomposition processes, such as those using HNO3, H3PO4, and HCl, are more
efficient in extracting rare earth elements from leaching solutions. However,
high phosphorous content and impurities make precipitation, crystallization,
and ion exchange methods unsuitable for these solutions.
The demand for phosphoric acid has reached maturity in
developed countries like North America and Asia Pacific, while increasing
agricultural activities and favorable government regulations in developing
countries like Asia Pacific, Latin America, and the Middle East & Africa
have fostered production and demand. Moreover, the projected global economic
growth of 3.7% annually is expected to reduce poverty and raise per capita
incomes significantly by 2050. Asia Pacific dominates the agricultural industry
and fertilizer consumption due to factors such as abundant fertile land,
favorable weather conditions, and large exports from developing countries.
Challenges in
Phosphoric Acid Market
Phosphate is an essential component in the production of
phosphoric acid and phosphate-based products like fertilizers and food &
beverage. However, excessive use of phosphate as a fertilizer has led to
pollution and eutrophication. The world's major reserves of phosphate are
depleting in quantity and quality, affecting the growth of the phosphoric acid
market. While recycling phosphate from wastewater is possible, it is not
economically feasible. This challenge poses a significant threat to the
industry's future growth.
Ecosystem of Phosphoric Acid Market
According to the forecast, the wet process is expected to
have the highest growth rate among the different types of processes used to
produce phosphoric acid. The wet process generates impure phosphoric acid that
can be used directly in fertilizer production, and the demand for fertilizers
is a significant driver of the wet process. Additionally, the wet process has
advantages such as lower operating costs, shorter processing time, lower
operating temperatures, and ease of operation, all of which contribute to its
growth. Furthermore, low-grade rock phosphate can be used as a raw material in
the wet process. However, the decreasing supply of rock phosphate remains a
significant concern for the phosphoric acid industry, as it has no alternative
source of phosphates. Despite the possibility of recycling phosphates from
wastewater, it is currently not economically viable.
The largest application of phosphoric acid, in terms of
value, during the forecast period, is projected to be in the fertilizers
segment. Fertilizers are composed of nitrogen, phosphorus, and potassium and
are essential for the growth and development of crops and plants. The demand
for phosphoric acid in fertilizers is primarily driven by the growing global
population, which necessitates increased food production using fertilizers. The
fertilizers segment is expected to dominate the phosphoric acid market during
the forecast period.
During the forecast period, Asia Pacific dominated the
phosphoric acid market in terms of value due to the presence of leading
fertilizer manufacturers and high demand for processed food. The market is
expected to exhibit the highest Compound Annual Growth Rate (CAGR) in the
region in terms of value and volume. This growth is attributed to the
increasing disposable income of the middle-class population and the demand for
processed food in emerging countries like China and India. ABGCL is the leading
manufacturer of food-grade phosphoric acid, which is made by the thermal
process, and the market is projected to benefit from the rising demand for packaged
food and bakery products.
However, the Chinese chemical industry has been under
scrutiny by the government to reduce environmental degradation and prevent the
spread of COVID-19, which led to the closure of some chemical manufacturing
plants, including phosphoric acid plants in Sichuan Province and other major
chemical manufacturing sites in the country for the first quarter of 2020. In
terms of volume, APAC and African countries are also anticipated to reflect
substantial growth due to the increasing demand for food. South Africa is a key
market for the product in Africa, where only 16% of the total land receives
sufficient rainfall for crop growth, and synthetic fertilizers and other
chemically-derived crop care products are used extensively to meet the local
food demand.
During the forecast period, Diammonium Hydrogenphosphate
(DAP) held the largest share of the market with a revenue share of over 35%.
The increase in demand for DAP fertilizers from the global agricultural
industry is the primary factor contributing to this growth. China, the United
States, Russia, Brazil, and Morocco are the world's leading manufacturers of
DAP. It has a high nutrient value and has therefore been a popular choice among
farmers worldwide. To produce one ton of DAP, an average of 0.4 tons of sulfur
is required to dissolve 1.5 to 2 tons of phosphate rock and around 0.2 tons of
ammonia.
The pricing of DAP is highly dependent on fluctuations in
the price and availability of feedstocks, transportation charges, and handling
and storage costs. The Monoammonium Dihydrogenphosphate (MAP) segment is
expected to register the fastest CAGR during the forecast period. China is the
largest MAP consuming country, while the largest MAP exporting countries are
Morocco, China, Russia, and the U.S., and the largest importing countries
include Brazil followed by the U.S., Canada, and Australia due to their growing
agricultural activities in the past two decades.
Monoammonium phosphate is experiencing the fastest growth
due to its highly essential components (nitrogen and phosphorus). The product
is water-soluble and mixes readily in moist soil. Universally, it is applied
under the surface of the soil near plant roots to achieve optimum plant growth
efficiency. In addition to its use as a fertilizer, the product is also
commonly used in formulating fire extinguishers, which are widely used across
all institutions globally as fire prevention safety protocols.
Dominating Companies in Phosphoric Acid Market
- ICL GROUP LTD.
- OCP GROUP S.A.
- ARKEMA SA
- SOLVAY SA
- THE MOSAIC COMPANY
- NUTRIEN LTD.
- EUROCHEM GROUP AG
- PHOSAGRO GROUP OF COMPANIES
- IFFCO
- MA’ADEN
- PRAYON GROUP
- ADITYA BIRLA GROUP
- WENGFU GROUP CO., LTD.
- INNOPHOS
- J. R. SIMPLOT COMPANY
- JORDAN PHOSPHATE MINES COMPANY (PLC)
- AGROPOLYCHIM AD
- CHAMBAL FERTILISERS AND CHEMICALS LIMITED
- DESMET BALLESTRA SPA
- THE FERTILISERS AND CHEMICALS TRAVANCORE LIMITED
- GUJARAT STATE FERTILIZERS & CHEMICALS LIMITED (GSFC)
- PARADEEP PHOSPHATES LTD. (PPL)
- VEDANTA LIMITED
- INDUSTRIAL CHEMICAL SOLUTIONS SP. Z.O.O
- Israel Chemical Ltd.
- Yara International
Recent Developments in Phosphoric Acid Market
- In May 2021, OCP Group, a Moroccan phosphate mining and
fertilizer company, signed an agreement to acquire a 20% stake in Fertiberia, a
Spanish fertilizer company, from its parent company Grupo Villar Mir. The deal
includes a long-term supply agreement for raw materials and is expected to
strengthen OCP's position in the European market.
- In December 2019, US-based agricultural company Nutrien
announced that it would acquire Brazilian fertilizer producer Agrium. The
merger would create the world's largest producer of crop nutrients and would
enhance Nutrien's position in the phosphoric acid market.
- In November 2019, Saudi Arabian Mining Company (Ma’aden)
announced a joint venture with Mosaic, a US-based fertilizer producer, to
develop a phosphoric acid plant in Saudi Arabia. The joint venture aims to
leverage Ma’aden's access to low-cost phosphate rock reserves and Mosaic's
expertise in phosphoric acid production.
- In August 2019, ICL, an Israeli chemicals company, announced
that it would acquire Fertiláqua, a Brazilian producer of specialty plant
nutrition and crop protection products. The acquisition would enable ICL to
expand its presence in the Latin American market and diversify its product
portfolio.
- In 2021, the global chemical company Solvay announced that
it had acquired the specialty phosphates business of Novaphos, a joint venture
between Veolia and Prayon. The acquisition includes Novaphos' phosphoric acid
plant in Morocco, as well as its phosphates production and research facilities
in France.
- In 2020, the Brazilian mining company Vale announced that it
was selling its fertilizer business, including its phosphates assets, to the
Norwegian fertilizer company Yara for $2.5 billion. The sale included Vale's
integrated mine and chemical complex in Cubatão, Brazil, which produces
phosphoric acid and phosphate fertilizers.
- In 2019, the Indian fertilizer company Coromandel
International announced that it had signed a memorandum of understanding (MOU)
with the Moroccan phosphate company OCP to explore opportunities for joint
ventures in the phosphoric acid and phosphate fertilizer sectors. The MOU also
covers potential collaboration on research and development of new products and
technologies.
- In 2018, the Belgian chemical company Prayon announced that
it had formed a joint venture with the Indian fertilizer company Gujarat State
Fertilizers & Chemicals to build a new phosphoric acid plant in India. The
plant, located in the state of Gujarat, has a capacity of 190,000 tons per year
and uses Prayon's proprietary technology to produce food-grade phosphoric acid.
In conclusion, phosphoric acid is an essential chemical
compound with a wide range of applications in various industries. From its use
in agriculture to the production of soft drinks and detergents, phosphoric acid
plays a vital role in modern society. Its versatility and importance in the
global market make it a valuable commodity that will continue to be in demand
for years to come.
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