With the coming
consumption season, the price of phosphate fertilizer has generally
followed an uptrend, topped by that of DAP. As of mid-Jan., 2013, the price of
DAP rebounded from the bottom point and maintained a continued upward trend
over one month. With the additional factor of rising freight charges, the purchasing
price of different varieties of phosphate fertilizer will be revised
upward again, according to CCM’s latest issue, “Phosphorus Industry China Monthly Report 1303”.
On Feb. 19th,
2013, China's Ministry of Railways announced a price hike in railway freight
charges, which took effect as of Feb. 20th, 2013. With a growth of nearly 13%
compared to previous railway freight charges, it will push up the purchasing
cost of products including phosphate fertilizer.
According to the
feedback from most phosphate fertilizer enterprises, they agree that this price
hike will have a greater impact on phosphate fertilizer than other goods. As
the transportation of phosphate fertilizer from the original production area to
the final consumption areas generally covers a distance of over 2,000
kilometres, it is preliminarily estimated that the increases in the railway
freight charges of phosphate fertilizer could reach USD4.78/t at least.
Furthermore, the
effect of the price hike of railway freight charges will also spread to other
products related to phosphate fertilizer, such as feedstock of phosphate
fertilizer——phosphorus ore and liquid ammonia.
Therefore, the delivered price of phosphate fertilizer will increase by no less
than USD7.96/t.
However, it is
forecasted that the price uptrend of various varieties of phosphate fertilizer
will be moderate.
Since 2007,
China's Ministry of Railways has made 11 adjustments to railway freight
charges, including three adjustments involving fertilizer. Relatively speaking,
this adjustment was milder than the previous one with a 14.9% increase on July
1st, 2009. In the meantime, China's fertilizer is still enjoying the exemption
of Railways Construction Funds.
Moreover, the
overall demand for phosphate fertilizer hasn't exhibited any surge in China
despite the coming traditional consumption season of phosphate fertilizer.
According to the statistics from China's Phosphate Fertilizer Industry
Association, it is predicted that the prevailing supply of phosphate fertilizer
will be sufficient during the spring of 2013, which means that there is limited
potential for price rising of phosphate fertilizer.
Besides, the
international FOB price of phosphate fertilizer still remained low in Feb.
2013, which might generate resistance against any price rising of domestic
phosphate fertilizer.
In the meantime,
it is also suspected that China's farmers will not accept the rising price of
phosphate fertilizer and thus sluggish sales might result.
Table Contents of Phosphorus Industry China Monthly Report
1303:
Yichang City
draws up blueprints for local phosphorus industry
Yichang City to
build a mining right exchange for phosphorus ore
Yellow Phosphorus
Integration grows
in the yellow phosphorus industry
China's phosphate
ammonium market forecasts unstable supply in 2013
Newyangfeng
Fertilizer to go public by reverse merger
Rising railway
freight to further lift phosphate fertilizer purchasing cost
Wengfu's TCP
facility comes on stream
Kailin Group
prepares for high-end fertilizer market
India's
purchasing power in relation to phosphate fertilizer continues to shrink
Market review of
prime phosphate chemicals in Feb. 2013
International
trade of phosphate chemicals in Jan. 2013
Price monitoring
of some phosphate chemicals in Feb. 2013
Phosphorus Industry
China Monthly Report, issued by CCM on 15th,
keeps providing the latest company dynamics related to China’s phosphorus
industry, and market analysis on supply and demand, import and export as well
as global insight.
About CCM
CCM
is dedicated to market research in China
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606
Email: econtact@cnchemicals.com
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