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The world ammonium phosphate industry experienced an extended period of overcapacity
and depressed markets beginning in the early 1980s. This was the combined result
of a major increase in world capacity beginning in the late 1970s, and a significant
slowdown in the rate of growth of world phosphate fertilizer consumption. During
the early 1990s, economic problems in the former USSR and Eastern Europe exacerbated
the problem. The impact on phosphate fertilizer consumption was so drastic
that total world consumption declined from a 1989 peak of about 38 million
metric tons of P2O5 to only 29 million metric tons in 1994. Since 1994, world
consumption has increased by 26% and recovered to within 97% of the historical
peak. World phosphate fertilizer consumption is expected to surpass the historical
peak early in the forecast period to 2010. Ammonium phosphates, however, were
not nearly so severely impacted as the phosphate industry overall.
The following pie chart shows world consumption of ammonium phosphates:
Apparent world consumption/production of ammonium phosphates peaked at about
19 million metric tons of P2O5 in the late 1980s and declined to approximately
16.4 million metric tons in 1993. World consumption then recovered, surpassed
the historical peak in 1998,and has increased significantly since. Overall,
consumption increased by 52% between 1993 and 2005 and an additional increase
of about 15% is projected during the forecast period to 2010. The average operating
rate for the world ammonium phosphate industry has increased from a depressed
range hovering around 70% between 1993 and 2001 to the 75–79% range.
The improved market balance is reflected in the substantial increase in ammonium
phosphate prices that has occurred since late 2002. Operating rates around
85% are generally considered to be the maximum that the world industry can
sustain over the longer term. The world balance has strengthened significantly
since 2001 and is projected to continue to improve significantly during the
forecast period.
The fob value of the world ammonium phosphate industry in 2005 is roughly
estimated at $6.5 billion, almost double the value estimated for 2001. The
stronger market balance is the primary factor, although there has also been
some cost escalation largely associated with higher fuel prices. Ammonium phosphates
are consumed primarily as fertilizer materials. Minor uses in animal feeds
and industrial applications (e.g., fire control and flame-retardant uses) probably
account for less than 3% of the world total.
A number of significant changes occurred during the 1993–2005 period.
Socialist Asia’s share of production has increased from only 1.5% to
24%, second only to the United States. Western Europe, which was the fourth-largest
producer in 1993, has dropped to number six. Large additional increases are
expected in Socialist Asia and Southwest Asia. A significant increase is also
expected in Africa. Smaller increases are projected for several other regions.
Probably the greatest change in recent years has been the development of the
ammonium phosphate industry in Socialist Asia (specifically China). China has
greatly increased production and consumption, significantly increased exports,
and reduced imports.
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