In MENA’s downstream phosphate rush, the mine is the easy part

Four MENA countries have more than ten downstream phosphate projects in their pipeline, whether they’re in construction, have secured EPC commitment or late-stage financing, or just early-stage MoUs. Each of them offers its own competitive advantage, but all of them are exposed to intermediary manufacturing inputs’ volatility.

China stepping back created the opening: Chinese phosphate exports have been constrained since the 2021 energy and fertilizer crisis, and phosphate fertilizer prices have stayed structurally higher than other fertilizers ever since, we were told. China — the world’s top producer of phosphate fertilizers and its second-largest exporter after Morocco — exported an average of 9 mn tonnes of ammoniated phosphates annually in 2019-2020 and 10 mn tonnes in 2021, but only 6.6 mn tonnes in 2024 and remained restricted through at least August 2026, even as global demand rose, according to the International Food Policy Research Institute (IFPRI).

“There is a void left by China, so there is demand to be filled, and the prices are incentivizing,” Guillaume Daguerre, senior regional director for corporate ratings in energy, natural resources, and infrastructure at Fitch Ratings, tells EnterpriseAM. With five years of high prices, bankability calculus on downstream projects changed globally.

Chinese contractors are building much of the new capacity. “Chinese engineering contractors appear across four markets [in MENA],” Kirolos Wassef, a Cairo-based economist and fertilizers analyst, tells EnterpriseAM. The China State Construction Engineering Corporation (CSCEC) and East China Engineering Company (ECEC) are at Abu Tartour. ECEC also appears on the Indo-Jordan Chemicals sulfuric acid plant. China Harbour Engineering Company (CHEC) is building Algeria’s Annaba port, with Italy’s Saipem on the integrated industrial complex. China National Chemical Engineering Corporation (CNCEC) and Sinopec’s SEG Nanjing hold contracts on Ma’aden’s phosphate expansion.

MENA holds more than three-quarters of the world’s phosphate reserves. Morocco alone holds roughly 68% of global phosphate rock reserves and produces more rock than every other MENA country combined, 36 mn tonnes in 2025, according to USGS Mineral Commodity Summaries 2026. Egypt is a distant third after Morocco and China at 3.8% of the world’s reserves, followed by Tunisia, Russia, Algeria, Brazil, and Saudi Arabia.

Reserve size does not determine who processes the rock, though. Saudi Arabia holds about 1.4% of global reserves, roughly a third of Egypt’s 3.8%, and is still the only MENA producer integrated enough to challenge Morocco at scale. Tunisia holds 3.4% and has imported Algerian rock to feed its processing plants since 2019. What separates the two is everything between the mine and the port: acid plants, imported sulfur and ammonia, rail, terminals and offtake contracts. “In phosphate fertilizers, the mine opens the conversation. It is the competitiveness of the entire supply chain that closes the financing,” says Raid M. Al Soub, an independent strategic advisor on fertilizers and chemicals and former secretary-general of the Arab Fertilizer Association.

More than USD 19.5 bn already committed

Five projects are past FID or in first-phase construction. OCP is spending USD 5.3 bn this year as part of a three-year, USD 14 bn plan for its Mzinda-Meskala hub in Morocco. The hub expands rock, phosphoric acid and finished fertilizer output, and its first phase is due in 2027. Sonatrach secured EPC contracts this year for the first phase of Algeria’s USD 7 bn Integrated Phosphate Project, and contractors broke ground in September. The first phase of Ma’aden’s USD 6.4 bn Phosphate 3 was 50% complete as of 1H 2026, with commissioning planned for 2027. Construction began last August on Egypt’s USD 658 mn Abu Tartour phosphoric acid complex, which is due to be commissioned in 2028. In Jordan, Indo-Jordan Chemicals secured EPC contracts in February for a USD 193 mn sulfuric acid plant with 900k tonnes a year of capacity, on a 30-month build.

Behind these sits a pipeline at varying stages. Indorama’s USD 535 mn Ain Sokhna complex in Egypt secured IFC and EBRD financing this year and is nearing financial close. Fertiglobe’s proposed DAP complex is still in feasibility studies. Ma’aden’s Phosphate 4 has gas supply lined up but has not finalized engineering. Jordan is exploring three partnerships. The first is with Oman’s OQ, covering phosphoric acid, sulfuric acid and DAP. The second is with Turkey’s Transpet on phosphoric acid. The third is between the Jordan Phosphate Mines Company (JPMC) and Arab Potash, for an integrated mine-to-port complex.

Sulfur is the input every producer imports

Producers react crushed phosphate rock with sulfuric acid to make phosphoric acid. They then add ammonia to make DAP and MAP, the two fertilizers that dominate global trade. Sulfur is a by-product of oil and gas processing, yet every MENA country investing downstream is a net importer of it. “[Most] North African producers, Morocco, Tunisia, Egypt, are 100% reliant on third-party imports,” Claira Lloyd, senior manager of fertilizer analytics at Argus, tells EnterpriseAM. Morocco imported 8.3 mn tonnes of sulfur in 2024, according to USGS. Saudi producers “procure sulfur from what are essentially their next-door neighbors,” Lloyd says.

Every step in the ecosystem adds margin and requires an input each of the markets may not fully control, from an input plant for sulfuric or phosphoric acid, to a logistics requirement that has to be sized correctly or the savings elsewhere disappear, Al Soub tells us.

Hormuz-driven disruptions are a case in point: QatarEnergy’s monthly sulfur contract climbed from USD 520 a tonne in March 2026 to USD 890 by July, where it held through August. It was cut to USD 880 in September and to USD 835 in October, still around 60% above February’s level. Sulfur cargoes effectively stopped crossing the strait for weeks at a time, and Argus now puts traffic at one to three sulfur vessels a week. Wassef says sulfur has reached USD 1k-1.2k a tonne in some markets, up from USD 400-500 in January. Sulfur has historically traded at 30-35% of the DAP price — that ratio passed 130% in May.

The impact was felt on earnings, production and tenders: Morocco’s OCP’s 1H EBITDA fell 28.5% on tripled sulfur costs, while the tender volumes Egyptian producers have offered to market “have been diminishing since the start of the war,” Lloyd says. And in Saudi, Ma’aden cut its 2026 DAP production guidance by 7% to 6-6.5 mn tonnes in August, and it’s likely that the company won’t meet this target — 2Q production in 2026 fell 28% y-o-y, and the year is well on track to close with elevated sulfur prices.

Buyers have moved toward triple superphosphate (TSP), which is made directly from rock and phosphoric acid, carries no nitrogen, and uses less sulfur-derived acid per unit of phosphate. OCP has followed them. TSP’s share of its fertilizer exports rose from 26% in 1H 2025 to 35% in 1H 2026, and in July it commissioned a third TSP line at Jorf Lasfar with around 1 mn tonnes a year of capacity. The shift started before the war: TSP’s share of Morocco’s processed-phosphate exports rose from 11% in 2020 to 24% in 2024. “TSP is not a retreat from integrated fertilizer production. It is a way of using integration more intelligently when feedstock costs and buyers’ preferences change,” Al Soub says.

Four producers, four exposures

Saudi offers the strongest promise for the whole ecosystem in the region, despite trailing its neighbors on phosphate reserves. “Ma’aden already operates a substantial mine-to-market system with domestic ammonia production and major logistics infrastructure,” Al Soub tells EnterpriseAM. Ma’aden produced 10 mn tonnes of rock in 2025, made 6.2 mn tonnes of DAP in 2024, and exported 5.7 mn tonnes of phosphate fertilizers that year, according to USGS numbers. The country runs ammonia production off domestic gas, moves rock on dedicated rail from Wa’ad Al Shamal in the north to processing at Ras Al Khair on the coast, and procures sulfur from Gulf neighbors rather than overseas.

Saudi is the obvious challenger to the Moroccan empire: “On current industrial scale and integration, Saudi Arabia is the clearest regional challenger to Morocco. Sulfur procurement and export logistics nevertheless remain material exposures,” Al Soub tells us.

The Kingdom is also diversifying: “Saudi Arabia is becoming more flexible towards NPKs and specialty products instead, which is something that will be potentially a heavier focus considering new plants it’s bringing online.”

Egypt has the elements but not at integration yet: Egypt mined 5.5 mn tonnes of rock in 2025, and in 2024 it exported 4.6 mn tonnes as raw material, more than it processes at home. Abu Tartour will ship exports through Safaga Port via a 680 km railway. Indorama’s Ain Sokhna complex would add up to 600k tonnes a year of phosphate fertilizers and related inputs, with about 80% for export, according to the IFC. Egypt imports both sulfur and sulfuric acid. “Connecting rock supply, feedstocks, sites and export channels economically will determine how much of Egypt’s potential is realized,” Al Soub says.

Algeria is moving from the lowest base, but with clear ambition: Sonatrach’s Integrated Phosphate Project targets 5.5 mn tonnes a year of rock extraction, 3.2 mn tonnes of phosphate concentrate, 2.4 mn tonnes of phosphate fertilizers and 570k tonnes of urea (nitrogen-based fertilizer). “The Algeria project is the one that would be the most interesting just because of its sheer size and the fact that Algeria hasn’t before had a presence such as this. We’ve seen rock come out of the country, but not necessarily the processed product, and that is what people are keeping an eye on,” Lloyd says.

The country also has many other advantages: Algeria holds roughly 3% of global reserves. Domestic gas is also a real advantage for the ammonia step.

But sulfur sourcing and execution discipline will be Algeria’s biggest challenges: “The [first phase] EPC contracts are meaningful milestones, but the proposed operation still depends on coordinated delivery of beneficiation, chemical plants, water, transport and port access. Algeria’s natural-gas position is an advantage; it does not remove the need for competitive sulfur sourcing and disciplined project execution,” Al Soub tells us.

SOUND SMART- Algeria’s project is planning a sulfuric acid plant down the line — though the sulfur feedstock itself still has to be imported because the country's hydrocarbon wealth has low sulfur concentration, which leaves Algeria exposed to the same cost signal impacting both established producers like Morocco and Saudi Arabia and upcoming ones like Jordan and Egypt.

Jordan is also building its ecosystem from the bottom up: Jordan holds roughly 1.1% of global reserves and extracts them harder than anyone else in the region. JPMC produced 12 mn tonnes of rock in 2025 and 717k tonnes of DAP at its Aqaba industrial complex in 2024, and operates the JIFCO phosphoric acid joint venture.

And it is expanding its intermediary inputs base: “Jordan is not starting from scratch. Its established phosphoric acid partnerships, including the operating JIFCO facility, are another important part of the value chain,” Al Soub tells us. Indo-Jordan Chemicals is building a USD 193 mn sulfuric acid plant, which will help JPMC lift its phosphoric acid output from 330k to 550k tons a year. The country also has three possible pre-FID projects that could add at least 300k tonnes of phosphoric acid and 900k tonnes of sulfuric acid if they advance.

Jordan’s advantage would be reliability, not scale: “Jordan’s constraints include imported sulfur and ammonia, limited water resources and dependence on export markets,” Al-Soub says. “Its best opportunity may lie in product value and reliability rather than a simple race for the largest tonnage.”

Oversupply — how likely?

Building too much when prices are down is a classical risk for cyclical commodities: “The risk in those cycles is always that because the prices are incentivizing you to build those plants, everybody rushes to do it, and then by the time they come online, there’s just too much product for the demand,” Fitch’s Daguerre tells us.

But rising global population, along with climate change, will help correct demand down the line: “We still expect that in the long run, demand will be rising in line with demography…that part of the equation, the demand side, is not too much of a concern,” Daguerre adds. Climate change has also proven to drive up the application of fertilizers (as well as pesticides) as crops struggle to absorb nutrients with extreme temperatures.