Event: on April 7, six departments including the Ministry of industry and information technology jointly issued the guiding opinions on promoting the high-quality development of petrochemical industry in the 14th five year plan.
The opinions pointed out that the new production capacity of ammonium phosphate and yellow phosphorus industries should be strictly controlled. The opinion points out that by 2025, the petrochemical industry will basically form a high-quality development pattern with strong independent innovation ability, reasonable structure and layout, green, safe and low-carbon, and the guarantee ability of high-end products will be greatly improved. We have extracted some guidance for the phosphorus chemical industry. 1) Promote the adjustment of industrial structure and scientifically regulate the industrial scale: strictly control the new production capacity of oil refining, ammonium phosphate, calcium carbide, yellow phosphorus and other industries, and accelerate the withdrawal of inefficient and backward production capacity. 2) Promote the coupling development among industries and improve resource utilization efficiency: improve the comprehensive utilization level of solid wastes such as phosphogypsum, titanium gypsum, fluorogypsum, desulfurization gypsum and other industrial by-products such as gypsum, calcium carbide slag, alkali slag and fly ash. 3) Enhance the guarantee of raw material resources: take multiple measures to promote the reduction, recycling and harmlessness of phosphogypsum, and steadily promote the “production based on slag” of phosphorus chemical industry. Under the background of the “double control” policy in the early stage, the supply of phosphorus fertilizer and phosphorus chemical industry will continue to be limited due to the constraints of energy consumption, environmental protection and phosphogypsum by-products.
There is a tight balance between supply and demand, and yellow phosphorus is expected to maintain high prosperity. On the supply side, according to the statistics of Zhuo Chuang information, the industrial capacity has gradually shrunk in recent years, from 1.96 million tons in 2017 to 1.7 million tons by the end of 2021, and the output has also decreased from 940000 tons to 606000 tons. In terms of price, restricted by the dual control policy of energy consumption, the price of yellow phosphorus once rose to 66000 yuan / ton in 2021. As of April 15, the price of yellow phosphorus fell slightly to 36583 yuan / ton from 39483 yuan / ton at the beginning of the year. At present, the downstream demand continues to rise, the supply of yellow phosphorus ore is tight, all phosphorus mines in Hubei have stopped mining, and the inventory of downstream ammonium phosphate enterprises is small. In addition, the phosphorus ore at the raw material end has been consolidated at a high level, adding to the strict control of the new capacity of the industry, we believe that yellow phosphorus is expected to continue to operate at a high level.
The gap of overseas demand increases, and the prosperity of phosphate fertilizer continues to rise. As the third largest exporter of phosphate fertilizer in the world, with the intensification of contradictions between Russia and Ukraine, the prices of raw materials such as oil and natural gas soared, resulting in the sharp decline of fertilizer production in some EU countries. According to Tass News Agency on April 10, Lithuanian lifosa company, an important phosphate fertilizer supplier in Europe, has stopped production. The shortage at the supply side has led to the soaring price of phosphate fertilizer in the overseas market. As of April 14, the FOB Baltic price of monoammonium phosphate was US $1205 / ton, up 48.37% from the beginning of the year; The FOB quotation of diammonium phosphate in the United States was US $1245 / ton, an increase of 53.69% over the beginning of the year. According to Zhuo Chuang information, the quotation of monoammonium phosphate in the Chinese market is 3575 yuan / ton, an increase of 24.35% over the beginning of the year, and the average market price of diammonium phosphate is 3985 yuan / ton, a slight increase of 5.47% over the beginning of the year. According to the statistics of the General Administration of customs, 100800 tons of monoammonium phosphate and 363400 tons of diammonium phosphate were exported from January to February 2022. We believe that with the increase of geopolitical risks and the decrease of overseas supply, the price difference of phosphate fertilizer at home and abroad is expected to be further widened, and Chinese phosphate fertilizer export enterprises are expected to fully benefit from the mismatch of supply and demand in the global market. The guidance limits the new capacity of the industry, and leading enterprises are expected to consolidate their industry competitiveness by virtue of their scale advantages.
Investment suggestion: we believe that this policy will effectively integrate the production capacity of phosphorus chemical industry and standardize phosphogypsum treatment, focusing on the leader of phosphorus fertilizer Yunnan Yuntianhua Co.Ltd(600096) , Hubei Xingfa Chemicals Group Co.Ltd(600141) , Guizhou Chanhen Chemical Corporation(002895) , Hubei Yihua Chemical Industry Co.Ltd(000422) , etc.
Risk warning: supply chain transportation risk; Product price fluctuation risk; Downstream demand was lower than expected.
