Phosphoric Acid Market

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.