Analysis of China’s Phosphorus Chemical Industry 2008

China Market Report
July 28, 2008
42 Pages - SKU: CMP2073231
License type:
Countries covered: China

Phosphate ore is the raw material of phosphorus chemical production, which produces yellow phosphorus and phosphate fertilizer, they both consume phosphorus ore accounting for 20% and 80% of total. General definition of phosphorus chemical production including phosphate fertilizer, phosphorus ore and all kinds of phosphorus fine chemical products, they play a very important part in the modernization of chemical industry. Phosphorus fine chemical products widely used in food, consumer goods and industrial areas, with the characteristics of consumer goods, the growth of demand is relatively stable.

China's phosphorus chemical production started quite late, but after 1990s, China, in particular the phosphorus ore resource-rich areas such as Sichuan, Hubei, Yunnan and Guizhou provinces, phosphorus chemical production developed rapidly, over 80 types of products, the annual production capacity of phosphorus fine chemical products is over 6 million tons, China has gradually become a large nation of phosphorus chemical production.

Presently the total reserves of world Phosphorus ore is roughly 45.78 billion tons, mainly concentrated in Morocco, China, the United States and the former Soviet Union, South Africa and other countries. China is the one of world's major manufacturing nation, phosphorus ore resources nearly 50 billion tons, only behind the world No1 Moroccan. However, the features of phosphorus ore resources in China are large amount but lack of quality. Due to the scarcity of phosphorus ore resources, every country has started to gradually restrict the exports of phosphorus ore.

The high oil prices and bio-energy have caused the world food crisis recent years, which has pushed the price of phosphate fertilizer rising continually. Since 2007, in terms of the rising production costs and strong demands, the price of phosphate fertilizer has been increased sharply, meanwhile, the price of phosphorus ore and phosphorus chemical products also increased. In order to ensure domestic supply of phosphate fertilizer and food security that China issued policy of restrictions on phosphate fertilizer exports; but, on the other hand, the global price has been continued to rise, the gap between global and domestic price has continued growth, the increase of exports tariff is difficult to curb exports, therefore, the shortage of domestic phosphate fertilizer will remain for a while in the future.

The impact of new export tariff on phosphorus export enterprises is relatively very small. The tariff adjustments, primarily for agricultural production and related chemical fertilizers and materials, with regard to the phosphorus chemical enterprises, mainly involved in the phosphate fertilizer and phosphorus ore export tariffs, it does not have direct impact on phosphorus chemical companies. But, on the other hand, in terms of the shortage of the world phosphorus ore has gradually intensified, the price of phosphorus chemical products will also face long-term upward trend. But, for Chinese phosphorus chemical companies, the advantage is the relative low price of phosphorus ore and energy, which will promote Chinese companies’ competitiveness and enhance their profitability.


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