Market and product

World nutrient sales marked an unexpected pausein 2012, which affected global fertilizer production and trade levels. Globalfertilizer demand was static, with ower consumption seen in key consuming countries.

This slowdown was dictated by economic uncertaintiesin several large countries, unfavourable weather conditions, and variations inexchange rates.

Global nutrient sales in 2012

Total nutrient sales in 2012 decreased to 226Mt nutrients on account of depressed fertilizer demand and significantcarry-over stocks in distribution systems and at the consumer end. Fertilizersales, which accounted for 80% of total sales, were estimated at 178 Mt nutrients,growing by 0.3% over 2011.

World nutrient sales were wholly supportedby growing domestic deliveries, as exports dropped by an overall 7.7%, to 48 Mtnutrients. Home deliveries rose by 2.1% to 178 Mt nutrients, contributing 80% of total sales.

Key developments in the international tradeof the main nutrients and raw materials in 2012 comprised lower trade volumesfor nearly all fertilizer products, intermediates and raw materials, and arecovery of fertilizer demand and imports in North America and East Asia. Chinare-emerged as a prominent importer of potash and sulphur and was the world’slargest exporter of DAP and urea, despite facing seasonal export tariffs in2012.

Short-term capacitydevelopments

Global nutrient demand was adequatelysupplied in 2012, with supply covered from production tonnage and importantstock carry-overs. Global production of ammonia, phosphate rock and potashtotalled 227.8 Mt nutrients. Globally, the fertilizer industry operated at 82%of installed capacity (compared to 85% in 2011), with a reduction seen in allsegments of the fertilizer industry.

In 2012, global nutrient capacity grew atan aggregate rate of 4% over 2011, adding close to 10 Mt nutrients. However,one-quarter of planned capacity additions in 2012 have been postponed to 2013and, in certain cases, to 2014. Close to 140 capacity expansion projects wouldbe completed in 2012 and 2013, of which about half would be located in China.

Global nutrient capacity is projected tocontinue to expand in 2013, with an overall increase of 5% compared to 2012,while overall supply would grow by 4% to 236 Mt nutrients. Increases in supplycapacity are projected for all three major nutrients, with the followingprojected growth rates: 4% for nitrogen, 5% for phosphorus, and 5% forpotassium.

Since 2008, the fertilizer industry hasinvested massively to ensure that fertilizer supply adequately meets the growthin global nutrient demand. Several of these projects are now winding down.Major urea projects are projected to start commercial production in Algeria,China and Qatar (2012). New merchant phosphoric acid capacity is seen inTunisia (2012) and Jordan (2013/14), while new granulation units for MAP andDAP will be completed in China and Morocco (2013/14). Potash projects inBelarus, Canada, Chile, China, Laos and Russia will add incremental capacitybetween 2012 and 2013/14.

Sales and trade prospects in 2013

Growth in fertilizer supply continued to beaffected by variable regional factors, including government fiscal policy,trade measures affecting fertilizers and raw materials, and access to feedstocksupply. The prospects of global sales in 2013 would show 2-3% growth, reaching232 Mt nutrients.

Global trade is seen as expanding atmoderate growth rates ranging between 3% and 7% for most products. A potentialupside recovery is anticipated for potash, and some relative tightness isforeseen for seaborne ammonia and sulphur.