Thursday, December 22, 2011

Increasing Electricity Price to Exert Cost Pressure on Yellow Phosphorus

Yellow phosphorus industry is going to be hit by the increasing electricity price. On Nov. 30th, National Development and Reform Commission (NDRC) announced the raise in the electricity price. It is estimated that the average price of electricity is to rise by 0.47p/kWh nationwide, up 6.8% compared with that of 2010. In accordance with the new scheme of electricity price, the adjustment is varied from region to region.  And the new scheme has taken effect since Dec.1st, 2011, according to CCM’s December issue of Phosphorus Industry China Monthly Report.

For yellow phosphorus producers, it means the cost of production is to rise by USD66.14/t at least. In addition to the national increase, electricity prices in Guizhou Province and Yunnan Province will rise by 0.79p/kWh and 2p/kWh respectively when the dry season (Dec., Jan.–Apr.) approaches each year, both whose increase is above 10% compared with that of level period (other seasons). That is to say, four prime production provinces (Hubei, Yunnan, Sichuan, Guizhou) will experience the pressure of increasing electricity price in different degrees.

Meanwhile, most of the downstream purchasers such as producers of phosphoric acid, STPP and POCl3, have expressed the huge pressure causing by the present price of yellow phosphorus and the poor sales recently. While for those yellow phosphorus producers, it seems hard for them to transfer the increased cost to depressed downstream industry in the short term.

Given this contradiction, it is believed that this dry season will be a tough period for most yellow phosphorus enterprises holding low self-sufficiency rate of electricity, as well as downstream purchasers of yellow phosphorus.

Source: Phosphorus Industry China Monthly Report 1112

Content of Phosphorus Industry China Monthly Report 1112:
Phosphorus ore
Company Dynamics: Wengfu Group's recycling technologies draw investment overseas    
Policy & Legislation: Policies guide future development of phosphorus industry  
Yellow phosphorus 
Industry Dynamics: Utilization regarding yellow phosphorus waste grows in China 
Industry Dynamics: Increasing electricity price to exert cost pressure on yellow phosphorus   
Phosphate Fertilizer
Policy & Legislation: Integration policy extends to downstream phosphorus products in Hubei  
Industry Dynamics: Winter storage of phosphate fertilizer not optimistic in China 
Industry Dynamics: Single superphosphate encountering dilemma in China    
Company Dynamics: Liuguo Chemcial to strengthen scope effect  
Fine phosphate chemicals
Company Dynamics: Hubei Xingfa joins hands with Wengfu for complementary advantage 
Industry Dynamics: Purification of wet-process phosphoric acid emerges in China 
Import & export
International trade situation of phosphate chemicals in October
Price Update
Price monitor of some phosphate chemicals in November

Phosphorus Industry China Monthly Report, a monthly publication issued by CCM International on 15th of every month, provides you the latest information on company dynamic, industry dynamic, factors impacting the price fluctuation, technology improvement, supply & demand of China's phosphorus industry.

(Guangzhou China, December 16, 2011)
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