The compound NPK/NP sector has demonstrated strong demand fundamentals over recent years with producers moving into the sector to benefit from growth in volume and higher margins.
The compound NP market has grown from 8 Mt in 2000 to 14 Mt in 2016. The increased appreciation of the benefits of NPK/NP by consumers has been a key driver for the strength of demand but there has also been a concerted and targeted marketing and sales effort from major fertilizer producers to develop new markets.
Demand for NPK/NP has grown at a faster rate than other fertilizers over recent years and this trend is expected to continue with Africa, SE Asia and Brazil areas of demand increases. By 2022, global compound NPK demand is expected to total 103 Mt with NP demand increasing to 18 Mt.
Producers have responded by either expanding existing operations, switching MAP/DAP capacity to NP/NPK or building new facilities in new production regions. Export orientated capacity has been added in established production regions of Europe and Russia but also in new supply origins of Morocco and Saudi Arabia.
Although demand has been strong, there will be competition for the demand of the future. Access to raw material, distribution routes, costs competitiveness and effective marketing efforts will be crucial in determining which producers are able to best grasp the opportunity.
CRU has just published a new NPK Market Outlook in response to this growth in NPK demand fundamentals.
