Takeaway

The presenter reports on a plan by Morocco's OCP and US co-op CHS to build a major phosphate facility on the US Gulf Coast. This move is designed to circumvent countervailing duties by importing duty-free phosphoric acid to produce DAP and MAP domestically, but the facility is not expected to be operational until nearly 2030 due to a lengthy approval process.

What the presenter said

• OCP and CHS are planning a new phosphate production facility on the US Gulf. [00:09]
• The US phosphate market has been a struggle since early 2021 due to countervailing duties imposed against Morocco and Russia. [00:20]
• The new facility will have a capacity of 1.2 million tons per year, primarily focused on DAP and MAP. [00:34]
• The presenter argues the plan is a "genius" way to bypass duties on phosphate rock by building the plant in the US and feeding it with phosphoric acid. [01:03]
• Phosphoric acid is not subject to the same countervailing duties. [01:12]
• This strategy allows for a US-based facility and jobs while avoiding the duty situation. [01:20]
• The project is not expected to be operational until almost 2030. [01:43]

Trade ideas

• None stated. The presenter's view is that while this is a "massive" long-term development for US supply, it is not expected to impact markets until close to 2030.

Levels and data cited

• Phosphate facility capacity: 1.2 million tons per year.

Risks and what would invalidate this

• The project faces a long timeline with extensive paperwork and processes before production can begin.
• The facility is not expected to be operational until almost 2030.