The world phosphates market: What risk for the European Union ?

26/05/2014
The world phosphates market:
What risk for the European Union ?
Fertilizer Working Group - 2 June 2014
Bérengère Lécuyer
INRA, LERECO
I - World supply of phosphorus
1.
2.
3.
4.
Reserve and production of phosphate rock
World exports of phosphate rock by countries
World exports of phosphate fertilisers by countries
Word price of phosphate rock and phosphate fertilisers
II - Supply of phosphorus in the European Union
1.
2.
3.
4.
The European consumption of phosphate fertilisers
The supply-chain of phosphate fertilisers in EU-27
Net Imports of phosphate rock in EU-27 by countries of origin
Net Imports of phosphate fertilisers in EU-27 by countries of
origin
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1. Reserves and production of phosphate rock
% world total
World PR resources = 300 Bt
World PR reserves = 67 Bt
Word PR production (2013) = 224 Mt
â Phosphate rock (PR) is
• Finite and non-renewable: world resources of PR are in total 300 billion tons
• Highly concentrated among countries: 85 to 90% of world's remaining reserves are
controlled by only five countries (Morocco, China, Algeria, Syria and Jordan)
â The distribution of production among countries is not the same as of reserves
• China, the United-States and Morocco account for 70% of word PR production
• China, the U.S. and South Africa keep their mined phosphorus for their own use
Source : US Geological Survey DATABASE
Realized with Philcarto : http://philcarto.free.fr »
2. Word exports of phosphate rock by countries
Mt of phosphates (HS 251010 and 251020)
30
China
25
Israel
Algeria
20
Russian Federation
15
Syria
Egypt
10
Peru
5
Jordan
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Morocco
â Morocco is the leading PR exporter (35-40% of world total export). The main phosphate rock
mines are state-owned that involves the danger of an unexpected/extraordinary price-setting.
â On an other hand, new exporting countries (Jordan, Peru, Egypt) are competing with Morocco
since 2006
â Some exporting/production regions of PR are subject to political crisis or instability (cf. Syria)
that could shut down their mined production or limit investments
Source: UN COMTRADE Database
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3. Word exports of phosphate fertilisers by countries
Mt of P2O5
16
Rest of the world
14
Tunisia
12
Jordan
10
Lithuania
8
Mexico
6
Morocco
4
Russian Federation
2
United States
0
China
â China, United-States, Russia and Morocco are the leading exporters of phosphate fertilizers
with 70% of total world exports.
â Exports from China are increasing but this situation is uncertain since China imposed a 135%
export tariff on phosphates after the 2008 global phosphorus price spike
Source: IFADATA
13. World price of phosphate rock and phosphate fertilisers
$/mt
1400
1200
DAP, $/mt,spot, f.o.b. US Gulf
1000
Phosphate rock (Morocco), $/mt,
contract, f.a.s. Casablanca
800
600
400
200
Jul-13
Jan-14
Jul-12
Jan-13
Jul-11
Jan-12
Jul-10
Jan-11
Jul-09
Jan-10
Jul-08
Jan-09
Jul-07
Jan-08
Jul-06
Jan-07
Jul-05
Jan-06
Jul-04
Jan-05
Jul-03
Jan-04
Jul-02
Jan-03
Jul-01
Jan-02
Jul-00
Jan-01
Jan-00
0
Source: World Bank DATABASE
â Since 2007, the price of phosphate rock and phosphate fertilisers is suffering from tight
conditions that result from a combination of factors including a strong increase in
demand in emerging countries, higher energy prices, insufficient investment in the
industrial sector, price-setting power (Morocco), implementation of exports tax (China),
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I - World supply of phosphorus
1.
2.
3.
4.
Reserve and production of phosphate rock
World exports of phosphate rock by countries
World exports of phosphate fertilisers by countries
Price of phosphate rock and phosphate fertilisers
II - Supply of phosphorus in the European Union
1.
2.
3.
4.
The European consumption of phosphate fertilisers
The supply-chain of phosphate fertilisers in EU-27
Net Imports of phosphate rock in EU-27 by countries of origin
Net Imports of phosphate fertilisers in EU-27 by countries of
origin
1. The European Consumption of phosphate fertilizers
Mt of P2O5
3,0
2,5
EU-15
EU-12
2,0
1,5
â In 2008/2009, consumption of
phosphorus in EU-27 decreased
by 30% compared with the first
half of the decade and is fairly
stable since there.
â Per year, the use of phosphorus
is declining in Western Member
States, while it is fairly stable in
Eastern Member States.
1,0
0,5
0,0
Source: FAOSTAT
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2. Supply chain of phosphate fertiliser in EU-27
Finite and non-renewable
resource
Intermediate product
Phosphate rock
Phosphoric acid
Mineral fertiliser
Straight phosphate fertiliser
Super phosphate simple and triple
Copound fertiliser
Ammonium phosphate
NPK fertilizer
Mt of P2O5
2,5
Mt of P2O5
2,5
2
Production
Net imports
2
Mt of P2O5
2,5
Production
Net imports
2
Production
Net imports*
1,5
1,5
1,5
1
1
1
0,5
0,5
0,5
0
0
0
â Since reserves of phosphate rock are almost non-existent in Europe (except for very small
deposits in Finland) European phosphorous requirements are supplied by imports
â Historically, the European Industry of fertilisers mainly imports PR that are then
transformed in fertilizers (mainly NPK fertilisers)
Source: IFA, statistics DATABASE
*Net imports are calculated as the difference between consumption and production
3. Net imports of phosphate rocks in EU-27
Mt of natural phosphates (CN 25101000 and 25102000)
10
9
Other countries
8
Tunisia
7
Egypt
6
Jordan
5
Israel
4
Algeria
3
Russian Federation
2
Morocco
1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
â Per year, the EU is importing around 6 million tons of natural phosphate. Exceptionally, in 2009
only 4 million tons of phosphates were imported.
â The EU is highly dependent on regions currently subject to political crisis. Morocco covers 3035% of all imports into the EU. Relations with Russia (14% of all imports) are unclear.
â The European industry is facing much higher production costs than in countries rich in
resource : PR price strongly increased and PR transportation costs are quite high
Source: Eurostat-Comext
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3. Imports of phosphate fertilisers in EU-27 by
countries of origin
kt P2O5
1.800
1.600
1.400
Autres pays
1.200
Israel
Norvège
1.000
800
Tunisie
600
Maroc
Russie
400
200
0
â Last years, the EU-27 has imported between 1 and 1,2Mt of phosphate fertilisers (P2O5) mainly
from Russia, Morocco and Tunisia
â As the EU-27 also exports phosphate fertilizers, net imports only reached 0.4/0.5 Mt each year
since 2008.
Source: Own calculation from Eurostat-Comext data
Conclusion
â Phosphate rock is finite, non-renewable and highly concentrated
among countries which are sometimes politically unstable
Ø
Ø
Ø
Risk of price-setting
Risk of a lack of investments or production shut-down
Risk of a resource depletion on the long run
â Main producers of PR don’t have the largest PR reserve but are the
main consumers of phosphates (China and United-States)
Ø
Ø
Risk of a resource depletion on the medium run in these countries and finally
a higher resource concentration at the global level
Implementation of exports tax reduce the availability of phosphorous
fertilisers on the world market
â Reserves of phosphate rock are almost non-existent in Europe
Ø
Ø
The EU is highly dependent on regions currently subject to political crisis
The European industry is facing high production costs
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