Upstream Feedstocks in Fertiliser Production

Before urea, DAP, or MOP reach farmers, they begin life as raw commodities. These upstream feedstocks are drawn from the energy and mining sectors. Their availability, cost, and trade routes directly determine fertiliser pricing and global food security.

1. Natural Gas (Methane, CH₄)

• Role: Supplies hydrogen for the Haber–Bosch process, converting atmospheric nitrogen (N₂) into ammonia (NH₃).
• Cost share: Up to 70–80% of ammonia production cost.
• Dependency: Fertiliser markets are tightly tied to gas markets; when gas prices spike, nitrogen fertiliser prices follow.
• Geography: Major nitrogen capacity is located near cheap gas reserves (US, Russia, Middle East).

2. Phosphate Rock

• Role: Crushed and treated with sulfuric acid to make phosphoric acid, the precursor to phosphate fertilisers (DAP, MAP, TSP).
• By-products: Gypsum and other residues.
• Geography: Morocco holds the largest reserves; China, Russia, and the US are also key.
• Dependency: Vulnerable to mining bottlenecks and geopolitics.

3. Potash Ore

• Role: Source of potassium for MOP, SOP, and newer products like polyhalite.
• Process: Deep underground mining, flotation, and refining.
• Geography: Concentrated in Canada, Russia/Belarus, Israel, and the UK.
• Dependency: Sanctions or mine closures have immediate global impact, especially for large importers like Brazil and India.

4. Sulfur

• Role: Converted to sulfuric acid, which is essential for phosphate processing. Also used in SOP and ammonium sulphate production.
• Source: By-product of oil refining and natural gas processing.
• Dependency: Fertiliser sulfur availability depends on energy sector throughput. When refining slows, sulfur tightens and phosphate costs rise.

5. The Unsung Inputs: Air and Water

• Nitrogen: Pulled directly from the atmosphere in ammonia plants.
• Water: Vital in cooling, chemical reactions, and granulation.
• These are abundant but still critical to operations.

Why Feedstocks Matter

• Fertiliser is an interlinked industry. Moves in energy or mining ripple directly into agriculture.
• Example: High European gas prices → ammonia shutdowns → more imports into Europe → global nitrogen trade disruption.
• Example: Oil refinery closures → reduced sulfur → higher phosphate processing costs.

Outlook

The shift to low-carbon production (green ammonia, circular sulfur recovery, recycling of phosphorus from waste streams) will reduce dependency on traditional feedstocks. But for now, the fertiliser market is only as stable as its upstream inputs.

‍