CRU: Abidjan or Andalucía - NPK Trade Altered as OCP and PhosAgro Strategies Cross Paths

LONDON, June 26, 2020 /PRNewswire/ -- OCP and PhosAgro are two of the preeminent global phosphate producers, with varying strategies. OCP has been targeting more market share across raw and finished phosphate products across the world, with ambitious plans for growth in Africa. PhosAgro has also expanded its global footprint over time. But strong domestic demand growth and a more conservative capacity expansion program mean its sales strategy is focused closer to home. However, some intriguing trade flows have developed in 2020, with PhosAgro nudging into OCP's establish West African market, and OCP increasing its sales into Europe. This Insight elaborates further on these strategies and considers whether these changing trade flows will become more established over the long term.

PhosAgro gains in West Africa in 2020 Q1

PhosAgro is a low-cost and diverse phosphate producer. Its medium-term strategy focuses on increasing sales in the Russian and European markets, outlined at its 2019 Capital Markets Day in London. PhosAgro produces fertilizer at Balakovo, Metachem (Volkov), and Cherepovets, which are set to receive varying levels of investment over the coming years to increase capacity. The company plans to strategically re-organise its production assets to better match sales geography, mainly geared towards 'close to home' markets.

Despite this, it has also been pushing into other regions such as the West African NPK market, dominated by OCP in recent years.

This has been very evident so far in 2020. Total NPK (excludes NP and PK) exports to major West African countries of Benin, Ivory Coast, Ghana, Togo, and Nigeria rose by 50% y/y according to available 2020 Q1 trade data. Much of this increase is from the company winning a major Benin NPK tender. For the same reason, OCP's traded market share in the region declined from a dominant 94% in 2019 Q1, to just 26% in 2020 Q1. This is surprising given OCP's more competitive freight costs into West Africa, its recent dominance in the region's NPK sales, and the company's focus on African sales.

Read the full story:
https://www.crugroup.com/knowledge-and-insights/insights/2020/abidjan-or-andaluc%C3%ADa-npk-trade-altered-as-ocp-and-phosagro-strategies-cross-paths/ 

Read more about CRU: http://bit.ly/About_CRU

About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 280 experts and has more than 11 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004 and Singapore in 2018.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

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SOURCE CRU

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