How Chemical Compounds Drive the Fertilizer Industry?

The modern fertilizer industry is built on chemistry. From the hydrogen that becomes ammonia to the acids that unlock phosphorus, every major crop nutrient begins its life as a chemical building block. Buyers searching “Sulphuric Acid Buy” often sit at the start of that chain, because this single input enables the production of a wide range of phosphatic fertilizers used worldwide.

The industry’s chemical backbone, in brief

Three nutrient groups dominate fertilizer formulation: nitrogen, phosphorus, and potassium. Each group relies on upstream chemical compounds and processes:

• Nitrogen is delivered mainly as ammonia-derived products such as urea and ammonium nitrate, made by combining hydrogen with nitrogen under pressure and heat.
• Phosphorus is unlocked from phosphate rock by reacting it with strong acids to produce phosphoric acid, which is then neutralised or granulated into products such as DAP, MAP, TSP, and SSP.
• Potassium comes primarily from mined potash salts, refined through physical and chemical steps before blending into finished fertilizers.

These streams converge in blenders and granulators, and eventually in agronomic programs that match nutrient forms to soils, crops, and climate.

Demand, supply, and affordability: recent trends

Fertilizer use is sensitive to affordability and the availability of chemical feedstocks. After prices spiked to record levels in the second quarter of 2022, global consumption fell sharply in the 2021–2022 period, before beginning a partial recovery in FY 2023 as supply chains stabilised. The International Fertilizer Association (IFA) reports that global fertilizer use declined by close to 3 percent in FY 2021 to about 194.7 million tonnes of nutrients, then by about 5 percent in FY 2022 to 185.1 million tonnes, before improving in FY 2023. IFA expects growth to slow again through FY 2027, with global use rising by roughly 1.2 percent in that year, and with South Asia and Latin America driving a large share of the gains.

Price signals have remained influential. According to the World Bank’s commodity monitoring, the global fertilizer price index rose again in 2025 amid strong demand and trade frictions, while product benchmarks such as triple superphosphate and diammonium phosphate recorded double-digit quarterly increases. The World Bank’s August 2025 update also noted an 8.1 percent monthly rise in the fertilizer sub-index, underscoring persistent volatility that affects application decisions and inventory planning.

Why ammonia matters so much

Ammonia is the foundation of nitrogen fertilizers. Its production accounts for about 2 percent of global final energy consumption and 1.3 percent of energy-system CO₂ emissions, because it relies heavily on hydrogen produced from natural gas or coal. This makes nitrogen chemistry both essential for food security and central to decarbonisation plans. Low-emissions hydrogen remains a small fraction of supply today, but investment interest is rising. The IEA’s 2024 assessments show low-emissions hydrogen production still under 1 million tonnes, even as project pipelines and final investment decisions increase.

Two implications follow for the fertilizer industry:

1. Energy transition risks and opportunities: Gas price swings change marginal ammonia costs and, in turn, the delivered price of urea and related products. As new low-carbon hydrogen capacity scales, producers can reduce emissions intensity and hedge against fuel volatility, though capital costs and market design remain challenges.
2. Regional trade reshaping: Energy economics and policy rules have encouraged cross-border ammonia movements and capacity rationalisation. European production has, at times, leaned on imported ammonia made from U.S. shale-based hydrogen, illustrating how upstream hydrogen choices ripple through to fertilizer footprints.

Unlocking phosphorus: the pivotal role of acids

Phosphate fertilizers begin with phosphate rock. To convert that rock into plant-available forms, producers digest it with strong acid to make phosphoric acid. In the United States, more than 95 percent of mined phosphate rock is used to make wet-process and superphosphoric acid, which then becomes DAP, MAP, and other phosphate products.

This chemistry depends on a huge volume of acid manufacturing. U.S. Geological Survey data show that about 90 percent of sulfur consumed is in the form of sulfuric acid, and the demand for this acid closely tracks phosphate fertilizer activity. The same USGS summary notes that phosphate projects are expected to add new sulfur demand, particularly in Africa and West Asia, where much of the capacity expansion is underway.

The process flow is well established: phosphate rock is digested with acid, the resulting slurry is filtered to produce “merchant-grade” phosphoric acid, and calcium sulfate by-product (phosphogypsum) is managed in stacks. This pathway has been the industry standard for decades, precisely because it yields a high-purity acid stream for downstream fertilizer manufacture.

Potash chemistry and blending

Potash products such as MOP (muriate of potash) and SOP (sulphate of potash) are not synthesised from hydrocarbons in the way nitrogen is, and they do not require acid digestion like phosphate rock. However, chemical processing still plays an important role, from flotation reagents used in refining to conversion processes that produce SOP from intermediate salts. IFA’s medium-term outlook anticipates potash capability growing from about 46.7 million tonnes K₂O in 2022 to 54.6 million tonnes in 2027, assuming trade routes remain open and logistics constraints ease.

Efficiency, nutrients, and environmental balance

The agronomic objective is not only to deliver nutrients but to deliver them efficiently. Recent FAO work on cropland nutrient balances shows significant surpluses at the global level in 2022: 82 million tonnes of nitrogen, 7 million tonnes of phosphorus, and 8 million tonnes of potassium in surplus relative to crop uptake. These surpluses underscore why better timing, placement, and product choice are priorities for both producers and farmers, as regulators in several regions tighten rules to reduce losses to air and water.

Efficiency improvements are becoming structural. IFA highlights growth in controlled-release formulations, stabilised nitrogen products, and water-soluble fertilizers for fertigation, as well as steady gains in nutrient-use efficiency metrics since the 1990s. This momentum is expected to continue as technologies, advisory services, and digital decision tools improve.

Geography of growth and what it means for chemicals

The next few years will likely see Africa, West Asia, South Asia, and Latin America contribute disproportionately to demand growth. That pattern has two chemical implications:

• Acid and phosphate supply near deposits: New and expanded phosphates capacity in Africa and West Asia calls for reliable acid plants and sulfur logistics. USGS notes that new sulfur demand is expected to arise in these same regions as phosphate projects advance.
• Ammonia flows and gas exposure: South Asian and Latin American markets rely on a combination of domestic production and imports. When gas markets tighten, local output becomes less competitive, and imports of ammonia or urea increase. These dynamic ties farm affordability to global energy conditions.

Volatility is a design parameter, not a surprise

Producers, traders, and farmers now plan for volatility as a normal feature of the market. The World Bank reports that fertilizer prices accelerated again in 2025, aided by strong demand and supply constraints. Meanwhile, sulfur contract prices have moved markedly over recent years, reflecting shifts in refining throughput, non-ferrous smelting activity, and new battery-materials projects that use leach processes requiring large acid volumes. The USGS describes sulfur prices in 2024 as variable, with quarter-to-quarter movements that mirrored demand swings.

For decision-makers, that means:

• Diversified sourcing for gases, acids, and rock.
• Flexible plant design that can adjust product slates and feedstock blends.
• Risk management through inventory, hedging, and contracts aligned with agronomic seasons.

Decarbonisation pathways and the role of innovation

The fertilizer sector’s chemistry is central to food security, so emissions reduction must progress without disrupting supply. Practical pathways include:

• Low-emissions hydrogen for ammonia: Scaling electrolysis or reforming with carbon capture can address the largest emissions source in the industry.
• Process efficiency and waste heat: Incremental heat-integration, catalysts, and electricity optimisation continue to cut energy intensity in established Haber-Bosch units.
• Phosphate process improvements: Acid plant heat recovery, improved filtration, and ore beneficiation can reduce energy per tonne of phosphoric acid and lower the environmental footprint of phosphogypsum stacks.
• Product innovation: Stabilised nitrogen, controlled-release coatings, and precision fertigation increase nutrient-use efficiency, reducing losses while maintaining yields.

What to watch in the next cycle

1. Hydrogen and ammonia investment decisions: Final investment decisions for low-emissions projects have accelerated, yet demand creation and policy clarity remain uneven. The pace at which new capacity reaches grid-power or renewable hydrogen will influence nitrogen fertilizer costs and emissions.
2. Phosphates expansion in Africa and West Asia: New mines and acid capacity will re-shape trade flows for both phosphoric acid and finished phosphates, and will raise regional sulfur and logistic requirements.
3. Affordability and price indices: Monitoring the fertilizer index alongside energy and sulfur benchmarks offers early warning of application pullbacks or rebounds that can ripple through crop markets.
4. Regulatory shifts on nutrient losses: Regions tightening rules on nitrogen and phosphorus emissions will influence product choice and encourage efficiency technologies. China’s policy experience and European measures already show measurable effects on nutrient consumption patterns.

Bottom line

Chemistry is the engine of the fertilizer industry. Hydrogen chemistry makes ammonia, acid chemistry unlocks phosphorus from rock, and refining and conversion steps bring potash into balanced blends. Market cycles, energy prices, and policy signals all act through these chemical pathways, determining the cost and availability of the nutrients that underpin global food production. The next phase of growth will not only depend on more tonnes but on smarter molecules: cleaner hydrogen, more efficient acid plants, and formulations that deliver higher nutrient-use efficiency with lower losses. By aligning upstream chemical choices with agronomic outcomes, the industry can remain resilient to price shocks, reduce its emissions profile, and continue to support food security for a growing population.