Market loses domestic phosphate industry

With the continuous improvement of product quality, Xingfa Group's phosphate products are exported to more than 30 countries and regions including Asia, Europe and Latin America. The picture shows the employees of the company are counting export products.

According to the editor, the current phosphate market has never been so tangled. The price is like a roller coaster ride. After several rounds of downturns, the market is filled with depressed and depressing atmosphere. Can not help people send deep questions: What is the market for phosphate in China? What are the reasons why the phosphate market soared? In the face of the embarrassing situation encountered by the domestic phosphate industry, the market seems to have lost its dominant direction.

Analysts of Sinochem Xinnet believe that this feeling is due to the lack of market demand on the one hand, and that export policies have been hindered by policy exports on the other, as well as the industry's concerns about the current construction of repeated capacity expansion.

After more than ten years of rapid development, the current domestic phosphate industry has indeed reached a critical point before the sudden change and must choose the direction of breakthrough. Taking a general view, the large-scale expansion of phosphate must be stopped, the proportion of primary products must be reduced, and the proportion of refined products must be significantly increased. Its purpose is to weaken the vicious competition of phosphate products, standardize the market order of phosphate, improve the overall operating efficiency of the industry, and make phosphorous products worth the price.

Since the 1970s, Europe, the United States, the former Soviet Union, and Japan have stopped or drastically reduced their yellow phosphorus processing industries from the perspective of protecting their own resources and the environment. Developing countries have implemented industrial transfers, either directly investing in factories to build factories or exporting capital, or importing yellow phosphorus or phosphorus products from these countries. This has provided opportunities for some developing countries, including China, to vigorously develop phosphorus chemicals. In the late 1970s, Jiangsu and Shandong, located on the eastern coast, took the lead in introducing yellow phosphorus plants from the former Soviet Union, Japan, and other countries, and opened the local phosphating process. Especially since the late 1980s, the provinces of Yunnan, Guizhou, Sichuan, and Hubei, where phosphate is the main origin, have established yellow phosphorus plants under the technical support of the eastern yellow phosphorus processing companies. The domestic phosphate development has shown an astonishing expansion rate. After more than 20 years of rapid development, by 2010, the domestic yellow phosphorus production capacity has reached more than 1.9 million tons, and the total production capacity of phosphoric acid and other phosphate products has exceeded 10 million tons, ranking first in the world.

Undoubtedly, rapid expansion has caused serious damage to the market order. This is mainly reflected in the fact that, along with the expansion of phosphates, all localities have been scrambling to replicate the same industrial chain. According to the reporter's understanding, in the above-mentioned phosphate mines' main producing areas, all the counties and villages that can excavate to phosphate mines are all pursuing the development of the phosphate industry as the first choice for revitalizing the economy. Enterprises are undoubtedly squeezed into a single-plank bridge, and it is inevitable to repeat the same industrial layout. And the product line is phosphate rock - yellow phosphorus - phosphoric acid, and then processed sodium tripolyphosphate, sodium pyrophosphate, sodium hexametaphosphate and other products. For a company, according to the above products, it seems that the deep processing route is perfect. It can even be used to extend the industrial chain and develop fine chemicals. The problem is that companies in the entire industry are building in such a way that they repeat construction. Things are self-evident. Imagine that the same technology, the same face once the product is brought to the market, coupled with limited market capacity, and supply and demand imbalance partial and narrow meet, the price war difficult to avoid.

Regional division of labor in coordination with the market's domestic phosphate market presents an out-of-order, sloppy state, indicating that the industry has reached a time when it must be standardized and optimized. In fact, as early as the 1980s and 1990s, the domestic phosphate industry had a good initial division of labor. This is the production of ores or yellow phosphorus from the central and western regions, and the deep processing of phosphate products from the east. Socialized large-scale production attributes avoid the waste of precious resources and malicious competition.

The eastern coastal areas have major market space, and the regional science and technology are relatively high. Phosphate processing takes a high-end route. However, due to the lack of phosphorus resources, eastern enterprises have lost the scale advantages of medium and low-end products in the limited market share competition. Only by avoiding unfavorable factors, they have given technology as much as possible by management, technology, and market advantages. Content leads the market.

“In recent years, we have adjusted the product structure, stopped the production of general industrial-grade products, and produced all food-grade products.” Wang Airong, director of Tianfu (China) Food Additives Co., Ltd., told reporters. According to her, the company is a wholly-owned subsidiary of Tianfu International Co., Ltd., headquartered in the Netherlands. Since the 1990s, it has mainly produced industrial grade sodium tripolyphosphate and sodium pyrophosphate, and only industrial sodium tripolyphosphate. With a production capacity of 60,000 tons, it is the largest production company in the eastern region. Since the international financial crisis took place in 2008, in view of the drastic drop in product prices and fierce competition in the market, the company currently produces various specifications that are popular in the international market in addition to the leading varieties such as edible grade phosphoric acid, sodium tripolyphosphate and sodium pyrophosphate. The sodium, potassium, ammonium, magnesium, aluminum and other phosphate series, a total of more than 100 kinds of products. These products are widely used in food, medicine and other fields, the market prospect is very broad.

Xuzhou Tianyuan Edible Chemical Co., Ltd. is a company that mainly deals with the processing of complex phosphates. As a food improver for taste modifiers, emulsion stabilizers, acidifiers, moisture retention agents, preservatives pH adjustment buffers, color modifiers and antioxidants, the complex phosphates are widely used in meat, aquatic products, dairy products, pastas, etc. Such processing, the potential market capacity is large, the internal technology content is also high, thus increasing the added value of the product. According to Yang Guisheng, deputy general manager of the company, the company currently uses order-based production. This business model has two benefits: First, it reduces inventory and avoids capital squeezes; second, it suppresses price cuts that are prone to occur due to hoarding products. Impulse to avoid the price war.

Although the phosphate companies in the central and western regions have the advantages of phosphate resources, electricity, and manpower, especially some enterprises that have their own mine and electricity integration, the low-cost advantage is even more obvious. However, their disadvantage is that they are far away from market players. Long-distance transportation increases logistics costs and offsets some of the cost advantages. Especially in the period when logistics and labor costs increase rapidly in the future, this offset will be even greater. Therefore, it is imperative for these enterprises to control the scale expansion and eliminate backward production capacity. They can no longer be "big and full," but rely on "specialization and perfection" to build their lives.

For the phosphate companies in the Midwest, it is necessary to use the discouragement of the warriors to open their eyes on the “culprit” excess capacity that disrupts the market order. We must resolutely implement the state's task of issuing energy-saving emission reductions. We must earnestly implement the “Environmental Yellow-phosphorus Industry Access Requirements” formulated by the Ministry of Industry and Information Technology in 2009, and the elimination of outdated production capacity measures formulated by the provinces. We cannot condone local protectionism. For example, in Yunnan Province, a major producer of phosphorus, the “Opinions on Promoting Structural Adjustment of the Yellow Phosphorus Industry” was promulgated as early as in 2007, which clearly stipulated that in 2007, 35 units of yellow phosphorus with a capacity of 5,000 tons would be eliminated. However, due to the complexity and diversity of all manufacturing companies in the industry, the implementation of time is not satisfactory. Since last year, the National Development and Reform Commission, the State Electricity Regulatory Commission, and the National Energy Administration jointly issued the “Notice on Clearing Preferential Electricity Prices for High-Consumption Enterprises, etc.” and decided to implement differential electricity prices for eight industries including yellow phosphorus. policy. If these policies and measures are implemented, they will play a positive role in eliminating outdated production capacity of yellow phosphorus.

When interviewing some western phosphate companies, the reporter learned that some companies that are not able to supply their own yellow phosphorus are also faced with a rather severe production and operation situation. According to Wang Jian, deputy general manager of Sichuan Mianyang Qixing Group Phosphorus Chemical Industry Co., Ltd., the company owns 35,000 tons of yellow phosphorus production capacity, and has an integrated production capacity of 110,000 tons such as sodium tripolyphosphate and sodium hexametaphosphate, and has its own power plant. Advantage. However, the company has a certain number of yellow phosphorus supply gaps to be outsourced. For this reason, the company has stopped industrial grade products such as industrial sodium tripolyphosphate, and only produces food grade, feed grade and other high value-added phosphate products.

Deterioration of supply and demand imbalances The overall supply and demand of phosphate caused by blind expansion has caused tremendous harm to the industry and the market, mainly in three aspects. First, the low operating rate of the industry, resulting in a huge waste of social resources; Second, disorderly competition led to the existence of a long-term price war, the product market prices have skyrocketed and plummeted; Third, poor quality of the industry operation, profitability is worrisome, affecting the overall transformation and upgrading.

It is understood that, compared with China's existing yellow phosphorus production capacity, the domestic and foreign markets combined demand is only 800,000 tons, China's existing production capacity exceeds the actual demand of 50%, so over the years the yellow phosphorus plant loading rate Always maintain the level of 40% to 50%, yellow phosphorus industry is very bad. The phosphate market has been in a state of saturation for a long time, naturally causing a large number of devices to be idle and serious waste of social resources.

According to customs statistics, in the past, China exported 80,000 to 100,000 tons of yellow phosphorus annually. After the international financial crisis in 2008, it fell below 50,000 tons per year. Other export varieties are sodium tripolyphosphate, sodium pyrophosphate, and sodium hexametaphosphate. , as well as other phosphates and phosphides. Among them, the export thermal phosphoric acid accounted for about 39% of the output, the sodium tripolyphosphate accounted for 67% of the output, and the other phosphates and phosphides accounted for 50% of the output. The total consumption of yellow phosphorus accounted for the total output of these yellow phosphorus %, on the other hand, China's exports of yellow phosphorus, phosphoric acid, phosphates and phosphides are equivalent to exporting more than 300,000 tons of yellow phosphorus, which is more than 1/3 of the total output of yellow phosphorus. This kind of product structure with strong external dependence has only limited production and production suspension once it meets the national policy of restricting the export of phosphorus products.

According to industry sources, the price war in the phosphate market has long been over. According to Fan Xide, general manager of Jiangsu Xuzhou Tianjia Edible Chemical Co., Ltd., since the formation of phosphate in the mid-western region in the early 21st century, companies in the region rely on abundant mineral resources and hydropower resources, as well as low-cost labor cost advantages, with low prices. The price of the product and the eastern companies launched a large-scale market battle. “Because everyone knows that the eastern part occupies more than 70% of the market in the country, anyone who is based in the east will gain the initiative.” Van Hidder said that in order to survive, the eastern companies have also participated in the price war. As a result of the fight, the parties involved suffered heavy losses. There is also the saying that “gold is a broken copper seller”, and precious resource products cannot be value for money, and even allow overseas markets to take advantage of it.

Deterioration of market competition will inevitably bring about soaring market crashes and low overall operating efficiency. In recent years, the phosphate market has given people the impression that the fluctuation is abnormal, the price fluctuations are too large, yellow phosphorus has experienced a historical price of nearly 30,000 yuan/ton, and there are also common floor prices below 10,000 yuan/ton; phosphates The main product, sodium tripolyphosphate, has hit a record high of RMB 12,000 per ton, and it is not difficult to see a “jumping price” of RMB 0.5 million per ton.

It is commonplace in the industry that the phosphate price is full of monkeys and jumps up and down. The main causes are: As a result of overcapacity, a large number of devices are underemployed and idle for a long period of time. When the market stock products are exhausted, or the policy causes cause the export to be profitable, the market immediately warms up, and those devices that are in a latent state drive one after another. The supply of time has soared, the market has failed to digest, prices have fallen immediately, and companies are looking forward to cashing out as soon as possible, naturally aggravating the sell-off behavior and quickly returning the price to its original position. Repeatedly, several years is a cycle. However, in the long-term, phosphate products are basically struggling around the cost line, resulting in low efficiency in the industry, even a few years of continuous loss of business, weakened their ability to innovate and hinder the industry transformation and upgrading.

Extensive intensive intensive industries want to break through Industry experts believe that after a few years, with the gradual maturation of WPA refining technology, its industrialization and large-scale production can be expected. Therefore, thermo-process phosphoric acid will gradually withdraw from the industrial-grade phosphate consumer market, giving way to refinement. In wet-process phosphoric acid, the demand for yellow phosphorus will gradually decrease. This yellow phosphorus will be concentrated in the consumption of food grade, pharmaceutical grade, electronic grade phosphoric acid, and downstream processing of phosphate, phosphide and its derivatives. By then, domestic yellow phosphorus consumption is expected to drop to 600,000 tons/year, and there will be a 20% to 40% decline.

At the same time, if China's yellow phosphorus production still accounts for 80% of the world's total yellow phosphorus output, the annual output will drop below 700,000, a drop of more than 30%. Experts suggest that China will no longer export ordinary yellow phosphorus and only export high-value yellow phosphorus and high-purity yellow phosphorus. The number of companies and the number of yellow phosphorus furnaces will be reduced by 50% on the basis of the current situation, and the plant load rate will be increased to 50. % to 60%.

According to Hua Xiaoxi, the Secretary of the Phosphate Branch of the Inorganic Salt Industry Association, “The practice of many years has proven that this low level of duplication and competition in the phosphate industry has caused the industry to remain unresolved for a long time, and its operational efficiency is low. The current industry must actively carry out resource integration and implement a large region, Cross-regional cooperation, focusing on doing a reasonable division of labor between the eastern and western regions: Western companies use resource advantages to lay emphasis on the production of industrial-grade products, while eastern enterprises rely on technology and market advantages to focus on processing high-end products, so as to avoid disorderly competition and promote the healthy development of the industry. “She believes that the phosphate industry will face a reshuffle. This is the time to eliminate backward production capacity and eliminate those companies that do not have the resources, technology, and management advantages. After the integration and reorganization of resources, the trade unions in the East, Central, West, and China have become more scientific and resource allocation has become more rational.

Hua Xiaoxi is optimistic about the future phosphate industry and market structure. Two models are preferred: First is Jiangsu Chengxing Co., Ltd., which is located in the east. They purchased yellow phosphorus plant in Yunnan, a province with large phosphorus production, and established a stable and reliable yellow phosphorus. Supply base, through the Yangtze River water transport, 1 ton of yellow phosphorus can process 3.7 tons of phosphoric acid, the advantages of logistics transport costs are particularly obvious. Chengxing Co., Ltd. also established the Jiangyin Changjiang Wharf, which enabled Phosphoric Acid to have a quick access to the sea. This “pre-store and post-plant” operation has enhanced its core competitiveness. The other is Hubei Xingfa Company, a leading phosphate company, which not only possesses the advantages of integration of mines and electricity and phosphorus, but also establishes a complete phosphorus chemical industrial chain, with obvious industrial clustering effects and strong ability to resist market risks.

Of course, many companies in the central and western regions have now begun to change their practice of setting up marketing offices in the east to seeking partners from the coastal areas, establishing joint ventures in the core areas of the market, establishing a community of interests, and completely eliminating blind competition and lack of competition. The idiosyncratic mode of cooperation is to participate in normal competition as a qualified market entity, so as to achieve industry breakthrough.

Obstacles to the expansion of environmental change Reasonable speaking, industry expansion is generally accompanied by expansion of market demand, but the domestic phosphate industry seems to run counter to it. In stark contrast to ferocious expansion, market capacity growth stagnates, and even signs of shrinking occur. . The reason is that the market environment at home and abroad has undergone new changes in recent years, which has markedly suppressed the domestic phosphate industry.

Domestically, over the past decade or so, as water bodies in some parts of China have become increasingly eutrophic, blue-green algae blooms have sprung up and the demand for detergent banned phosphorus has been rising. The coastal areas have spread rapidly to inland areas. The main product of phosphate, sodium tripolyphosphate, is considered to be the culprit responsible for the eutrophication of water, and it has been restricted to use in detergents in more and more areas. As a result, the main use of sodium tripolyphosphate as a detergent builder has largely disappeared and the market has been hit hard. For example, in 2002, the highest output reached 940,000 tons, and by 2005 it had been reduced to 740,000 tons, and in recent years it has dropped to about 200,000 tons. Although sodium tripolyphosphate can also be used as an industrial water softener, dyeing assistant leather tanning agent, and ceramic additives, it is used in small quantities and is insignificant compared with the production capacity.

Another expectation of the domestic phosphate market is that it is a food additive, but the cultivation of the market for edible phosphate is slow and limited. At present, more than ten kinds of products have been listed in the national “Standard for the Use of Additives for Use of Additives” (GB2760-2011), and have been applied to the processing of meat products, aquatic products, dairy products, and noodle products, but the proportion of output is insufficient. 10%, limited digestion. What is particularly unfavorable is that due to pollution incidents involving melamine and lean meats in recent years and the arrival of edible phosphates, relevant authorities have maintained a cautious attitude toward them, such as the newly revised “Standards for the Use of Additives for Additives” in 2011. In addition, individual species were also removed from the catalog. “Now, the food processing industry is more cautious about using food additives. Adding standards and using the lower limit has become the most common conservative use method.” Van Heide said that this also affects the market demand for edible phosphate.

On the export side: Because of the strategic resource characteristics of yellow phosphorus, it will be influenced by the policy and it will naturally affect downstream products. On July 15, 2010, the Ministry of Finance and the State Administration of Taxation issued the "Circular on Canceling the Tax Refund for Exports of Certain Commodities." More than ten types of phosphates were covered, which undoubtedly increased the operating costs of exporting companies. According to the current phosphate mainstream price of 7500 yuan / ton, to implement the export tax rebate rate of 5%, an increase of export costs of 375 yuan per ton of product. With such a high cost increase factor, it is difficult for general companies to digest, and exports will lead to the loss of most enterprises.

At the same time, China’s primary product export model of phosphate and energy resources has not only caused us to lose resources and make less money, it has also caused continuous foreign trade frictions. In recent years, China has received many cases from India, the United States, etc. The export of phosphate anti-dumping investigations. To this end, the state adopts measures to limit exports and enforce higher levels of export tariffs. At present, it still maintains an additional 20% export tax rate, and the intention to curb exports is quite obvious. In addition, phosphate rock is a non-renewable resource and yellow phosphorus itself carries a large amount of energy. From the perspective of long-term resources and energy strategies, it is a general trend to limit large-scale exports.

In addition, as the parent material of organophosphorus pesticides, yellow phosphorus consumes about 100,000 tons of yellow phosphorus each year due to the processing of pesticide intermediates. However, since 2007, China has banned the use of five kinds of highly toxic organophosphorus pesticides, including the ban on the production of highly toxic organophosphorus pesticides. This has also made the industry The demand is greatly reduced. At the same time, glyphosate pesticides have slumped since the international financial crisis in 2008, and output has fallen to a low point, reducing the demand for yellow phosphorus.

International: In recent years, in the context of China’s technological exports, some countries in North Africa that have phosphate resources have rapidly risen to form hundreds of thousands of tons of production capacity and are competing with China for European and American markets. If *** has already formed a production capacity of 150,000 tons of phosphate, Algeria's current phosphate production capacity has exceeded the 250,000 tons mark, and related companies rely on its superior geographical location and maritime advantages, its products have squeezed part of the market. According to industry judges, this trend will continue. At present, the crowding-out effect has already emerged. The shrinking export volume is a clear indication that the annual export of phosphate products in China has dropped from the 600,000 tons in previous years to the current 200,000 tons.