Wednesday, October 31, 2012

Phosphate fertilizer market forecasts more imbalances in H2 2012

China’s phosphate fertilizer consumption seemed unlikely to catch up with the stable production growth in H2 2012, according to the forecast from China’s Ministry of Industry and Information Technology (MIIT), according to CCM’s October issue of Phosphorus Industry China Monthly Report.

On Sept. 10th, MIIT released a notice regarding China’s fertilizer industry operation of H1 2012 and gave a forecast on the supply and demand market in H2 2012. China’s phosphate fertilizer industry would see more imbalances between supply and demand in H2 2012, compared to H1 2012.

The notice showed that China’s phosphate fertilizer industry witnessed the increasing output and decreasing profit in H1 2012. Coupled with nearly 3,000,000t/a new capacity of phosphate fertilizers entering into the market in 2011 and 2012 in succession, China’s total output of phosphate fertilizers grew to 9.80 million tonnes in H1 2012, increasing by 18.3% year on year.
Meanwhile, the rising prices of feedstock like phosphorus ore and sulfur greatly squeezed the margins of enterprises in H1 2012. China’s overall phosphate fertilizer industry generated USD6.04 billion revenue and USD190.85 million profits in H1 2012, respectively increasing by 18% and decreasing by 33.1% year on year.
Low operation rate drove up unit cost. According to the data from China Phosphate Fertilizer Association, the operation rate of DAP plants was 65% in H1 2012, versus 75% in H1 2011, while MAP and NPK fertilizers plants only operated facilities when receiving orders. Among China’s 34 MAP producers, two of them had suspended the production and 11 showed negative growth in production.

The notice also indicated that the development of China’s phosphate fertilizer industry would become tougher in H2 2012. China’s exports of phosphate fertilizers would draw to close in Sept. as low tariff period was about to end. Furthermore, although the demand for phosphate fertilizers would show seasonable uptrend in the coming autumn, it could still foresee the depression after autumn, especially when China’s exports of phosphate fertilizers dropped sharply and a massive supply glut would occur in H2 2012.
In general, China’s consumption volume in phosphate fertilizers was estimated to be around 8 million tonnes. The output of phosphate fertilizers in 2012 was expected to reach 17 million tonnes according to the conservative estimation. However, China’s exports of phosphate fertilizers won’t exceed 3 million tonnes in the whole year of 2012, indicating that domestic supply of phosphate fertilizers would approach 14 million tonnes, far more than the demand.

Source: Phosphorus Industry China Monthly Report 1210

Headlines of Phosphorus Industry China Monthly Report 1209
Editor's Note
Headlines of Phosphorus Industry China Monthly Report 1210

Phosphorus ore
Company Dynamics: Hubei Xingfa’s new beneficiation line to put into operation 
Industry Dynamics: Phosphorus accompanying resources shaped commercialization     

Yellow Phosphorus
Industry Dynamics: Yellow phosphorus producers to rid of price fear in Oct.

Phosphate Fertilizer
Industry Dynamics: Phosphate fertilizer market forecasts more imbalances in H2 2012 
Policy & Legislation: China to fine tune layout of phosphate industry  
Industry Dynamics: Phosphate fertilizer production keeps strong despite tough external environment     
Fine Phosphate Chemical
Company Dynamics: Sichuan Lomon expands phosphorus business in Hubei    
Company Dynamics: Yoke Technology expands sales to Europe

Global Insight
The Mosaic’s Q1 2013 fiscal result shows DAP price rebound in the US

Supply & Demand
Market review of prime phosphate chemicals in Sept. 2012

Import & Export
International trade situation of phosphate chemicals in Aug. 2012

Price Update
Price monitor of some phosphate chemicals in Sept. 2012
… …

Phosphorus Industry China Monthly Report, a monthly publication issued by CCM 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, Aug.15, 2012)

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