As a result of the tough downstream market and intensifying competition from substitutes, yellow phosphorus is expected to suffer increased risks of sales stalling in China, according to Phosphorus Industry China Monthly Report issued by CCM in July.
Most yellow phosphorus is used to make thermal-process phosphoric acid, which is then processed into various types of phosphate products.
Adding to already tough market conditions, in June the government of Guiyang announced plans to ban the production and sale of detergent with phosphorus, which will put further downward pressure on sales volumes of phosphoric acid and yellow phosphorus.
The yellow phosphorus market could see ongoing contraction in the face of intensifying competition from substitutes over the next several years.
Most phosphoric acid producers say domestic sales of thermal-process phosphoric acid are quite weak. Hubei Xingfa and Jiangyin Chengxing both indicated that thermal-process phosphoric acid sales suffered in June 2013, and expect poor sales to continue. Some yellow phosphorus producers also attribute poor sales to competition from purified wet-process phosphoric acid.
Some phosphoric acid purchasers in Sichuan Province report purified wet-process phosphoric acid prices as much as USD32.47/t cheaper than thermal-process phosphoric acid—a significant price advantage.
In 2013, two purified wet-process phosphoric acid plants (one in Sichuan Province and another in Fujian Province) owned by Wengfu Group Co., Ltd. (Wengfu Group) maintained a stable production. These two plants have a total capacity of 250,000t/a for producing purified wet-process phosphoric acid. Some yellow phosphorus producers located in Sichuan Province complained that Wengfu Group's cheaper phosphoric acid is pulling down their sales.
And with ever-increasing attention on saving energy, Chinese phosphoric acid producers have been trying to reduce dependence on yellow phosphorus. Hubei Xingfa and Guizhou Kailin have both launched purified wet-process phosphoric acid projects.
Domestic consumption of yellow phosphorus has held steady at around 800,000 tonnes annually, but that volume could come under pressure from shrinking demand and intensifying competition from substitutes.
Table of Contents of Phosphorus Industry China Monthly Report 1307:
Editor's Note
Headlines of Phosphorus Industry China Monthly Report 1307
Phosphorus Ore
Half-hydrate wet phosphoric acid technology innovation in China
Hubei Xingfa applies for issuing new debts to replace maturing debts
Yellow Phosphorus
Yellow phosphorus to foresee increased risk of sales stalling
Phosphate Fertilizer
Chinese phosphate fertilizer industry goes through a hard time in H1 2013
No positive note leave to China's phosphate fertilizer market in June
Fine Phosphate Chemicals
The US to continue imposing anti-dumping duties on Chinese sodium hexametaphosphate
Jiangsu Yoke's TCPP & BDP production project obtains government recordation
Global Insight
Weakening phosphate fertilizer trade continues
Brief news
Sichuan makes progress on phosphorus resource exploration
Inner Mongolia to develop phosphorus chemical industry
Supply & Demand
Market review of prime phosphate chemical in June 2013
Import & Export
International trade of phosphate chemicals in May 2013
Price Update
Price monitoring of some phosphate chemicals in June 2013
Phosphorus Industry China Monthly Report, issued by CCM on 15th, keeps providing the latest company dynamics related to China’s phosphorus industry, and market analysis on supply and demand, import and export as well as global insight.
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