Phosphoric Acid Market is forecast to reach $16.09 billion by 2026, after growing at a CAGR of 5.9% during 2021-2026. High usage of phosphoric acid for the production of phosphate fertilizers, such as Mono-Ammonium Phosphate (MAP) and Diammonium Phosphate (DAP), is expected to drive the market over the forecast period. Globally, phosphoric acid is the second-largest consumed inorganic acid after sulfuric acid. It is industrially produced in three grades with different concentration levels as per its end use. The three grades include food grade, agriculture grade, and industrial grade. Agriculture grade phosphoric acid leads the global market, in terms of value as well as volume, owing to its high usage in the manufacturing of fertilizers.
Phosphoric Acid Market Segment Analysis – By Application
Fertilizers sector has dominated the market for Phosphoric Acid Market in 2020, by growing at a CAGR of 5.5% during the forecast period 2021-2026. The rapid growth in agricultural output in China and the economic progress of the country has propelled the demand for phosphate fertilizers. This, in turn, has resulted in a rise in the domestic production and consumption of the product in the nation. However, owing to stringent government regulations, the production is anticipated to register moderate growth rate over the forecast period. On the contrary, in India, the chemical is anticipated to register significant growth, both in terms of production as well as consumption. Moreover, an increase in agricultural activities and the growing exports of fertilizers are expected to have a positive impact on production. The constant ongoing debate over food safety with respect to crop yield and efficient cultivation of crops also has a positive impact on the market. However, problems arising due to the over usage of phosphate and nitrogen-based synthetic products have led to the development of sustainable options, such as micronutrients and organic chemicals. Development of such bio-based products has ushered in a greater emphasis on their competitiveness against conventional fertilizers available in the market today. This, in turn, will have a negative influence on market growth.
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Phosphoric Acid Market Segment Analysis – Geography
APAC dominated the Phosphoric Acid Market share with more than 47% in 2020, followed by Europe and North America. The phosphorus acid has gained strong benefits from the rapid development of the food processing industry in countries, like China and India, and other developing countries. Also, the Chinese government estimated that the annual demand for phosphoric acid from China might reach more than 200,000 metric ton, in the upcoming years. Most of the manufacturers are consistently expanding production capabilities in order to cater to the growing demand for phosphoric acid. Factors, such as high production rate and lower labor rates, have led developing countries to account for the major share of the phosphoric acid market in the region.
Phosphoric Acid Market Drivers
The major growth driver in the global phosphoric acid market is phosphoric acid’s use as a flavoring agent, acidity regulator in various foods and beverages. The acid plays an essential role in water treatment plants, as it reduces the pipework’s corrosion and lime scale deposits and controls pH of water along with black and red liquors. Numerous developing countries are now focusing on scaling up their phosphate mining and phosphate production. Governments of different nations are now collaborating with various vendors globally for setting up plants for generating fertilizers or for obtaining phosphate rocks for phosphoric acid manufacturing, thus, driving the global phosphoric acid market growth. The appearance of organic phosphate fertilizers is also contributing to the phosphoric acid market expansion. These fertilizers prevent manufacturing of by-products, as they do not utilize chemicals during manufacturing and act as soil conditioners. Increasing accessibility of genetically modified seeds might hamper the expansion of the phosphoric acid market on a global scale. This is due to the fact that these variant seeds do not need pesticides and fertilizers apart from being are pest-resistant.
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Phosphoric Acid Market Challenges
The impact of COVID-19 and the oil prices war are proving to be a two-pronged crisis for oil, gas, and chemicals companies. Oil prices are dropping due to failed agreements on production cuts and the need for chemicals and refined products is slowing from industrial slow-downs and travel restrictions in the wake of this global pandemic. Because of the effects of the COVID-19 coronavirus, global chemical production declined by 3.1 percent in March 2020. Although chemical production increased in some categories in January 2020 as compared to December 2019, production in February compared to January and in March compared to February declined in every category. Leading manufacturers are reducing capital and operational expenditure in the face of the crisis. Manufacturing operations for these companies have been scaled down to 40%-60% capacity due to labor shortages and disruptions in the supply of raw material. Despite of hike in investment the growth can be impacted by the COVID-19 pandemic crisis till the end of year 2020. Moreover, COVID-19 pandemic has further deteriorated the industry which is affected the Phosphoric Acid Market.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Phosphoric Acid Market. In 2019, the market of phosphoric acid has been consolidated by the top five players accounting for xx% of the share. Major players in the Phosphoric Acid Market are Kazphosphate LIC, Acron OAO, Eurochem, Argium, CF Industries, Innophos Holdings, Foskor, Italmatch Chemicals, Chemische Fabric Budenheim, Vale, Yara International, The Mosaic Company, Yuntianhua Group, United Phosphorus, Saudi-Arabian Mining Company, Jordan Phosphate Mines, Solvay-Rhodia, Laxness, OCP, Potash Corp., OJSC Phosagro, Israel Chemical, and Prayon, among others.
Growing population has also led to a decline in arable land and hence there is a requirement for quick growing chemicals. This is one of the prime reasons triggering the usage of synthetic chemicals over natural or bio-based ones. The U.S. is one of the dominant agrochemical industries of North America and is home to different fertilizer manufacturing companies.
The product demand in the developed countries of North America and Asia Pacific has reached a maturity phase, generating a moderate growth for the chemical. However, increasing agricultural activities and favorable government regulations in the developing countries of Asia Pacific, Latin America, and the Middle East & Africa have fostered the production and demand for phosphoric acid.
However, the end use industries are being significantly affected due to the COVID-19 pandemic, as most of the countries have issued “stay at home guidance” i.e., lockdown. This factor is limiting the market growth in current situation.
Related Reports :
A. Diammonium Hydrogen Phosphate Market
B. Inorganic Acid Market
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