Phosphorus Industry China Monthly Report 1601(12 issues per year)

Date: 2016-02

“At the beginning of 2016, China’s phosphate fertilizer market began its off season and market prices of leading products (MAP, DAP, etc.) sank further. In view of severe overcapacity, market prices of phosphate fertilizers are unlikely to recover in the short term. Fu Xiangsheng, chairman of the CPCIF, disclosed that a 3-year action plan will be issued soon to adjust the industrial structure of China’s fertilizer industry.
In Jan. 2016, Guizhou Kailin announced a revenue of USD5.61 billion (RMB36.5 billion) in 2015, breaking yet another sales record. A key factor in this was its efficient and comprehensive use of mineral resources and its sustainable green development path, according to CCM.
In Jan. 2016, Xinyangfeng Fertilizer announced to set up a wholly owned sub-subsidiary in Jilin Province and to build a new compound fertilizer project. CCM believes that to occupy market shares in Northeast China, which is a big fertilizer consumption market, enterprises should take the opportunities to develop new fertilizers in Northeast China in accordance with the national chemical fertilizer consumption zero growth initiative.
On 12 Jan., 2016, Yihua Group released its 2015 financial report, showing that both of its revenue and operating profit recorded YoY growths. As the company’s second phase phosphorus chemicals project in Songzi City with a total investment of as high as USD384.43 million will be put into operation in 2016, CCM believes that the company will have a better performance in 2016.
In Jan. 2016, Yunnan Yuntianhua revealed its decision to issue corporate bonds and got final approval of its private placement plan by the CSRC. This will not only improve and optimize Yunnan Yuntianhua’s financial structure but also accelerate the expansion of its industrial chain, encapsulating phosphorus downstream products.
This month, Jan. 2016, Hubei Xingfa is resolutely carrying out two new operational activities to further integrate its phosphorus ore resources. CCM believes that this will further guarantee a stable supply of raw materials for the company, improve the efficiency of its management and operations and enhance its ability to cope with market risks.
This month, Jan. 2016, it is reported that the ZHONGLINEX.COM has not only created a transaction value of over USD920,000 but also built e-commerce platforms for the phosphorus chemical industry, the agriculture industry and for financing within 35 days since it was launched. CCM believes that this will accelerate the transformation and upgrading of the phosphorus chemical industry in China.
In Jan., 2016, two technological research and demonstration projects for low-grade phosphorus ore contracted by WIT passed acceptance checks. With the release of related scientific research accomplishments, it will be beneficial for phosphorus chemical enterprises in Hubei province to introduce these technologies, which can help them deal with development and utilization problems relating to medium-low grade phosphorus ore while saving scientific research costs and time.
In Dec. 2015, operating rates of Chinese yellow phosphorus manufacturers further dropped and market prices of yellow phosphorus stopped declining at the end of the month. CCM predicts that domestic yellow phosphorus manufacturers may try to raise their product prices but the real transaction prices will not increase significantly in the short term .
In Dec. 2015, China’s STPP market was still depressed. Operating rate of the industry further dropped as the Chinese Lunar New Year was coming. Market price of STPP remained quite stable. Reduced supply failed to increase market price due to the persisting weak demand from downstream markets. CCM predicts that market price of STPP will not fluctuate significantly and will maintain relatively stable in the short term in China.”

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