Power loses phosphate prices or has peaked

Sinochem Xinxun's recent phosphate market, with the raw material price of yellow phosphorus stabilizing, and the short-term downstream demand weakened, the export situation did not appear a positive turnaround, coupled with the approaching the end of the year low season, the overall market showed a weak trend of consolidation.

Yellow phosphorus pulls up its kinetic energy

Downstream follow-up price increases

Since the third quarter of this year, yellow phosphorus has been used as a high-energy-consuming industry that consumes as much as 15,000 kWh of electricity per ton of product. In some major producing areas, it has been subject to energy-saving and emission-reducing pressures. It has generally encountered production restrictions and production restrictions, and production capacity has been greatly constrained, causing a domestic As the price of rounds soared, its market price rose to the current level of 17,500 yuan (t price, the same below). Affected by the yellow phosphorus market, downstream phosphate prices followed a rising trend. For example, the main varieties of sodium tripolyphosphate and sodium pyrophosphate also rose from the previous 6,000 yuan to around 7,000 yuan.

The industry generally believes that the current period before the end of the year is a key moment for energy conservation and emission reduction in various regions. The main yellow phosphorus production areas such as Suichuan Hubei are facing more stringent energy conservation and emission reduction regulatory measures, although the market is relatively competitive for yellow phosphorus companies. Big temptation, but the overall yellow phosphorus driving rate is not constrained by the policy, the market supply is difficult to increase, so the possibility of yellow phosphorus prices remain stable in the short term is too large, even if there is a fall, the decline is limited. Therefore, due to the stabilizing effect of yellow phosphorus prices, this transmission factor has apparently ended the reason that phosphate prices continue to follow the upward trend. The signs of tops have already appeared and their prices may decline slightly.

Festival season is getting farther

The market has entered the traditional off-season

The third quarter has traditionally been the peak season for the sales of phosphates, especially in the early days of the Mid-Autumn Festival and the National Day. Food-grade phosphate is the golden season of the year. It is mainly used in aquatic products, meat products, pasta products and dairy products processing industry. However, after the holiday season began, phosphate has no greater market demand. As for the demand for industrial-grade products, the demand for sodium tripolyphosphate as a washing aid is gradually shrinking due to the influence of phosphorus banned by detergents and phosphorus, and the development of new applications in new areas is slow. Today, industrial-grade phosphate products are limited to use in a few traditional fields such as ceramics and electroplating, and growth has been extremely slow.

At present, the production companies seem to be eager to expand the use of phosphate products in food processing, feed, medicine, electronics and other fields, but these demand growth in the short term is not satisfactory. According to Zhao Jun, general manager of Jiangsu Xuzhou Cologne Phosphate Co., Ltd., taking food-grade phosphate as an example, although there are dozens of production varieties, according to China's "Hygienic Standards for the Use of Food Additives," only three are included in the Appendix. Sodium polyphosphate, sodium pyrophosphate, sodium dihydrogen phosphate, potassium dihydrogen phosphate, trisodium phosphate, potassium tripolyphosphate, sodium hexametaphosphate, and more than ten varieties. Products that are not in the catalog are strictly prohibited from being used in food processing. This undoubtedly restricts other varieties from entering the food processing industry. “A lot of experiments need to be done for each additional category in the catalogue. Not only do authoritative departments need to do it, but also the investment is huge and the experiment period is longer. This is obviously not what the production companies can accomplish. Therefore, the water is hard to understand and thirsty. Market expectations can't be too high." Zhao Jun said. In addition, since the "Food Safety Law" has been implemented since June 1 this year, if it does not engage in food processing in accordance with its prescribed variety or maximum usage, it will face high economic penalties. Therefore, there is no obvious market demand for food-grade phosphate before the end of the year, and prices will not continue to rise.

Export situation is difficult to improve

Industry urgently needs to be eliminated

Due to the serious internal consumption of disorderly competition among domestic phosphate companies, the export price is always low, and the gross profit margin of the industry is very low. Since the implementation of the "Notice on Canceling the Tax Refund on the Export of Certain Commodities" issued by the Ministry of Finance and the State Administration of Taxation on July 15 this year, more than ten types of phosphates have been covered, which undoubtedly increased the cost of exporting enterprises. If the current price of sodium tripolyphosphate is 7,000 yuan and the export tax rebate rate is calculated at 5%, the export cost will increase by about 350 yuan. This kind of burden, in addition to the advantages of mining and electricity integration of the company, the general enterprises have lost the export enthusiasm.

At the same time, overseas market demand for phosphate products in China is also shrinking. Wang Jian, deputy general manager of Sichuan Mianyang Qixing Phosphorus Chemical Industry Co., Ltd., told the reporter: “The historical period of China’s massive export of phosphates has passed. In particular, the overseas market capacity of industrial-grade products is gradually shrinking.” In the case of China's technological output, the phosphate industry, which is not high in its own technological content, is in large numbers in some developing countries. For example, *** has already formed 150,000 tons of phosphate production capacity, and Algeria's current phosphate production capacity has exceeded 250,000. Ton mark. In the past, China exported 400,000 to 600,000 tons of phosphate products each year. This is why the domestic price of yellow phosphorus has risen sharply. Phosphate prices can only follow the upward trend and cannot maintain the root cause of the simultaneous surge.