Summary of this issue:
The upstream of phosphorus chemical industry is phosphorus ore, the midstream is phosphoric acid and yellow phosphorus, and the downstream is various phosphorus chemical products. Phosphate rock is the main source of phosphorus. It can be processed into phosphoric acid by wet process or yellow phosphorus by thermal process to realize the enrichment of phosphorus, and then produce various phosphorus chemical products in the downstream. Phosphorus chemical products can be used in agrochemical industry (phosphate fertilizer, calcium phosphate feed additive, organophosphorus pesticide), food (phosphoric acid can be used as food additive, phosphate, etc.), electronic industry (phosphoric acid etchant), daily chemical industry (laundry, water purification agent), medicine, etc. among them, phosphorus fertilizer is the largest downstream of phosphate rock, accounting for 70%, followed by calcium phosphate, Therefore, agrochemical industry is the largest downstream of phosphorus application. China's phosphorus chemical industry has the characteristics of high proportion in the upstream and middle reaches and low proportion in the output value of fine phosphorus chemical industry in the downstream. The output value of energy consuming and polluting products such as yellow phosphorus and agricultural fertilizer is high. Under the background of stricter environmental protection, the "three phosphorus" regulation aims at removing the production capacity of phosphate rock, phosphate fertilizer and phosphogypsum. The industry has been in a downward boom since 2016, and the outlook will improve under the double favorable conditions of supply and demand until 2020.
Intermediate products: wet process phosphoric acid is the trend to replace thermal process phosphoric acid. Phosphoric acid and yellow phosphorus are two different ways of phosphorus enrichment. Yellow phosphorus consumes too much energy. The cost of producing phosphoric acid from yellow phosphorus is higher than that of wet reprocessing. With the gradual maturity of purified phosphoric acid technology, many phosphorus chemical enterprises plan to build purified phosphoric acid production capacity. However, 1t phosphoric acid will produce 5T phosphogypsum, and phosphogypsum treatment will become the bottleneck of the expansion of phosphorus chemical industry. Companies with mature phosphogypsum treatment production lines have greater expansion advantages.
Agrochemical products: phosphate fertilizer and glyphosate are at the peak of prosperity. Map / DAP is the most used phosphate fertilizer component. China's phosphate fertilizer industry is complete and has been overcapacity for a long time. In 2015, the Ministry of agriculture formulated the strategic plan of zero increase in chemical fertilizer, and phosphate fertilizer began to gradually reduce its production capacity. The map production capacity decreased from 26.8 million tons in 2016 to 19.81 million tons in 2021, and the DAP production capacity decreased from 26 million tons in 2016 to 22.05 million tons in 2021. The industrial competition structure improved and the concentration increased, Since 2021, the demand for phosphate fertilizer has increased and the inventory has continued to decline. At the same time, the price of upstream raw materials has increased, and the price of phosphate fertilizer has also increased significantly. Glyphosate is the world's largest herbicide category. China has more than 70% of the world's glyphosate production capacity, and most products are exported. At present, glyphosate has two production processes: glycine method and Ida method. China is mainly based on glycine method, but IDA method is more environmentally friendly than glycine method, and the subsequent new production capacity will gradually tilt to IDA method. Looking back on history, the increase in glyphosate demand is related to the increase in the planting area of genetically modified crops. The two complement each other. They are mainly used for crops such as soybean, corn and cotton. The demand of the United States, Brazil and Argentina is in the top three. Since 2021, supported by cost and demand, the price of glyphosate has been rising all the way. In addition, there are phosphates such as calcium hydrogen phosphate in the agrochemical sector, which are used as animal feed additives.
Lithium iron phosphate: riding the east wind of new energy batteries, the demand is growing rapidly. Lithium iron phosphate is an important cathode material for lithium batteries. Since the state will no longer subsidize new energy vehicles in 2022, automobile manufacturers have increased their consideration of cost. Lithium iron phosphate batteries with lower cost exceed ternary lithium batteries and become the first battery type in terms of shipment. Lithium iron phosphate will enter the production expansion cycle in 2020, and the production capacity has reached 689000 tons / year in 2021, With a year-on-year increase of 90%, the capacity under construction to be put into operation in 2022 and beyond will also be 710000 tons / year, and the bulk commercialization trend of lithium iron phosphate is obvious. Among the many production processes of lithium iron phosphate, iron phosphate process has more cost and performance advantages, and is expected to become the mainstream process. The demand will also increase simultaneously. Many phosphorus chemical enterprises announced to expand the capacity of iron phosphate in 2021 to increase the profits of phosphorus chemical enterprises.
Related subjects: Xinyangfeng Agricultural Technology Co.Ltd(000902) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Chengdu Wintrue Holding Co.Ltd(002539) , Guizhou Chanhen Chemical Corporation(002895) , Sichuan Development Lomon Co.Ltd(002312) , Anhui Annada Titanium Industry Co.Ltd(002136) , Jiangsu Yangnong Chemical Co.Ltd(600486) , Lier Chemical Co.Ltd(002258)
Risk factors: 1. Policy risks such as stricter environmental protection and carbon neutralization; 2. Upstream commodity price change risk; 3. Risk of battery technology route change of new energy vehicles
