Wednesday, July 18, 2012

China to Become Main Force for Global DAP Market from June

Although China is weaker than the US in pricing power for DAP in the international market (Note: According to the previous situation, China’s DAP producers or DAP traders were apt to follow the contract price set by the US-based Phosphate Chemicals Export Association, Inc. (PCEA) and India’s purchasers), China is still to become the main force in global DAP market from June to September, 2012, according to CCM International’s July issue of Phosphorus Industry China Monthly Report.

China and the US are the top two exporters of DAP worldwide—accounting for 70% of the international market; while India is the biggest importer of DAP in the world. In 2011, China and the US respectively exported 4.02 million tonnes and 3.97 million tonnes of DAP. Amongst the exports, most were exported to India, respectively reaching 2.103 million tonnes and 2.41 tonnes.
In general, China’s DAP producers and traders would export proper export volumes of DAP according to the export policy each year —increasing export volumes in low export tax season (the details of China’s export tariff for DAP in recent three years could be seen in page 6 issue 1, Vol.2: CTCSC continues to restrain export of phosphate fertilizer, and in page 6 issue 2, Vol.1: Export tariff curbs urea and DAP export in H1 2011).
Therefore, with the opening of the window for DAP’s low tariff in China from June to September of 2012, China is bound to export large amounts of DAP during this period. Based on the export situation during the previous year, nearly 64% of total was exported (Note: There’s no change in the definition of peak season and slack season between 2011 and 2012).

Relatively speaking, the current supply of DAP in Russian Federation and the US was tighter than that in the previous year.
Firstly, the yield of DAP in Russian Federation and the US decreased relatively. During the first quarter of 2012, the US-based and Russia-based DAP producers—The Mosaic Company and PhosAgro both cut their production.
Secondly, the US was seeing a surge in domestic consumption of DAP, which will weaken its international supply ability. According to the data from The Fertilizer Institute (TFI), the strong demand for DAP in the US led to a low inventory in May 2012, which has decreased by 27% month on month to 251,000 tonnes.
Contrary to Russian Federation and the US, China is expected to contribute more force to the international market of DAP. In 2012, there’re nearly more productivity excess of DAP in China, because of the release of 1,000,000t/a new capacity during the first half of 2012.

As for the international demand for DAP, it mainly depends on the prime purchaser—India which consumes over 50% of the exported DAP worldwide.
It’s predicted that India’s import volume of DAP won’t be less than that of last year, and is expected to remain around 7 million tonnes according to the previous data.

Source: Phosphorus Industry China Monthly Report 1207

Content of Phosphorus Industry China Monthly Report 1207:
Phosphorus Ore
Company Dynamics: Wengfu Group strives for improvement of self-sufficiency
Industry Dynamics: Rare earth accompanying resources to boost value of phosphorus ore  
Global Sight: Battle for phosphorus resources grows in Russia
Yellow Phosphorus
Policy & Legislation: Kaiyang's subsidy for yellow phosphorus producer to face challenge 
Phosphate Fertilizer
Policy & Legislation: Declined export guarantee money for DAP to relieve traders' pressure
Company Dynamics: China BlueChemical to rank among forefront of phosphate industry 
International Market Dynamics: China to become main force for global DAP market from June
Policy & Legislation: Role of phosphate fertilizer reserve stratagem is changing
Fine Phosphate Chemical
Industry Dynamics: APP attracts investment from medium phosphorus enterprises   
Company Dynamics: Hubei Xingfa appreciates development of food-grade phosphate chemicals 
… …

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.

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