Phosphate demand remains strong
With the supply environment for phosphate fertilizers tightening, we must also look at how the demand will likely play out. The demand could impact prices and phosphate producers (XLB) like Mosaic (MOS), Nutrien (NTR), and Israel Chemicals (ICL).
The above chart shows that the global demand for phosphate has gradually increased since 2015. Due to oversupply, the strength in demand did little to move phosphate prices in a positive direction. In 2018, Mosaic expects the global phosphate demand to be at 70 million metric tons. In 2019, the global phosphate demand is expected to increase to 70 million metric tons–72 million metric tons.
Previously in this series, we discussed how the supply for phosphate fertilizers is moving towards a tighter environment. Phosphate prices might continue to see an uptrend due to higher demand.
In our recent price update series, we saw how DAP (diammonium phosphate) and MAP (monoammonium phosphate) prices continued to rise year-over-year and were at an all-time high in the past year. Fertilizer demand and tight supply are having a positive impact on prices.
Next, we’ll discuss the outlook for potash fertilizers.