Wednesday, February 6, 2013

In 2012, China's entire phosphate industry appears moderate

In 2012, the entire phosphate industry appears moderate in China, without dramatic ups and downs as contrast with that of 2011. Through attaching quota system to phosphorus ore export and imposing a high export tariff on phosphate fertilizer, China kept a control on exporting phosphorus resources from 2009, out of protecting natural resources. Under the market pressure in 2012, however, China has to loosen the export of phosphate fertilizer to relieve the pressures created by current over capacity according to CCM’s January issue of Phosphorus Industry China Monthly Report.

Nonetheless, there're still some noteworthy events in 2012. We picked up hot topics in phosphorus industry in 2012 as follows: As well as most chemical commodities in China, domestic phosphorus products also behaved poorly in terms of price in 2012—both in upstream phosphorus feedstock and downstream phosphate chemicals.
Phosphorus ore Subjected to the sluggish performance of downstream firms, China's phosphorus ore market saw a weak rising in price in 2012 as compared to that in 2011. From Feb. to mid-April, phosphorus ore in each production provinces saw the first price rising in 2012. The rise in Hubei, Yunnan, Guizhou and Sichuan Provinces were around USD7.95/t, USD9.54/t, USD10.33/t and USD4.77/t, respectively. Since then, prices of phosphorus ore behaved steadily in Hubei Province by the end of 2012. As for prices in other three provinces, they saw a slight fluctuation but within a range of no more than USD6/t since May of 2012.
However, apart from the continuous rising throughout 2011, the price of phosphorus ore in Guizhou Province drop a little instead in H2 2012, because of lower tolerance from downstream industry.
Yellow phosphorus   Generally speaking, yellow phosphorus received poor performance in terms of price in 2012. From Feb. of 2012, the price of yellow phosphorus kept uptrend as driven by rising phosphorus ore price. However, the reduction of production cost and the depressing demand from downstream industry jointly brought a downtrend in the price of yellow phosphorus from April to Aug. of 2012. Although the price of yellow phosphorus rebounded from early Sept., it was still far lower compared to that in the early 2012.

Unfortunately, the booming production and sales didn't bring more profits for phosphate fertilizer manufacturers in 2012. Instead, China's phosphate fertilizer firms performed worse in 2012 than they did in 2011, especially as contrasted with nitrogen fertilizer industry, potash fertilizer and even compound fertilizer industry.  
Overall, China's phosphate fertilizer firms saw a visible weakening in profitability in 2012. With a 15.9% of year-on-year growth in revenue but a 26% year-on-year decline in profits, China's phosphate fertilizer manufacturing generated USD10.82 billion of revenue and USD345.15 million of gross profits in prime business during the first ten months of 2012.

Phosphorus Industry China Monthly Report is a monthly publication released by CCM. It offers timely update and close follow up of China’s various kind of Phosphorus market dynamics, analyze the market data and trends. Major columns include market dynamic, company dynamic, raw material supply, price update, import & export analysis, consumption trend & competitiveness.

About CCM
CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.
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