Friday, June 28, 2013

Hubei Xingfa foresees a profit down in H1 2013

On June 3rd, 2013, Hubei Xingfa Chemicals Group Co., Ltd. (Hubei Xingfa) reported it expects to report a 30-50% decline in net profit in the first half of 2013, compared to USD25.66 million of net profit in H1 2012, according to CCM’s Phosphorus Industry China Monthly Report issued in June.

Hubei Xingfa attributed the expected profit drop to the following three points:

Firstly, the market price of phosphorus ore is declining while the cost of phosphorus mining is rising.

Secondly, electricity costs have risen sharply because of drought. Hubei Xingfa gets most of its electricity from hydropower it owns. But drought has caused Hubei Xingfa to buy more electricity from more expensive outside sources than last year to maintain production.

Thirdly, the company's newly launched 600,000t/a DAP project has suffered losses. The project came on stream at the end of 2012, and is operated by wholly owned subsidiary Yidu Xingfa Chemical Co., Ltd. (Yidu Xingfa). Obviously, Hubei Xingfa overestimated the tendency of phosphate fertilizer market.

Hubei Xinfa's performance reflects the status of China's entire phosphorus chemical industry. While phosphorous ore business has been highly profitable in recent years, margins of the phosphorus chemical industry are getting thinner as gloominess in the downstream phosphate fertilizer market spread to the upstream phosphorus ore market. New projects face a tough time generating profitability, and the profit margin of phosphorus manufacturing firms in the entire industry is being squeezed.

Editor's Note
Headlines of Phosphorus Industry China Monthly Report 1306
Phosphorus Ore
Yuntianhua completes asset reorganization
Hubei Xingfa foresees a profit down in H1 2013
Yellow phosphorus
Yunnan publishes energy consumes across local yellow phosphorus industry
Phosphate Fertilizer
CPFIA to work out schemes for weeding out excess phosphate fertilizer capacity
Rapid appreciation of RMB to aggravate China's phosphate fertilizer export
Investment on fertilizer project went up in Q1 2013
Fine Phosphate Chemicals
Phosphorus flame retardant foresees huge growth potential
Global Insight
Saudi Arabia breaks into China's phosphate fertilizer market
Brief News
Guizhou Province to launch Technology Roadmap for local phosphorus chemicals industry
Jinchang City to construct a sulfur-phosphorus industrial park
China to make rules for stacking phosphogypsum
Supply & Demand
Market review of prime phosphate chemical in May 2013
Import & Export
International trade of phosphate chemicals in April 2013
Price Update
Price monitoring of some phosphate chemicals in May 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.

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, and consultancy service. 

For more information, please visit

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

No comments: