Under the expectation of tightening the double control of energy consumption in Yunnan Province, yellow phosphorus gradually "has a price but no market" this week: according to the dynamic display of a number of commodity information agencies, on September 16, yellow phosphorus in Sichuan, Guizhou, Yunnan and other places will not be quoted for the time being, and only a few areas will actually talk about it.

"The reduction in yellow phosphorus production has led to difficulties in snatching goods. In the third quarter, some large factories have suspended export sales to protect their own use. The tight supply has begun to raise prices, and the seller's reluctance to sell has increased." Longzhong information phosphorus chemical industry analysts told the Caixin News Agency reporters, the current energy consumption reduction measures have landed, yellow phosphorus and its downstream products still have a significant increase in space.

From the industrial chain, yellow phosphorus is located in the middle of the phosphorus chemical industry, and the end products include flame retardants, phosphorus-containing pesticides and phosphoric acid. Caixin News Agency reporters from Xin 'an shares (600596.SH), morning shares (300610.SZ) and other downstream companies learned that the current raw material inventory is currently reasonable, cost changes will eventually be reflected in the price increase of products, the final price situation depends on the cost and market supply and demand.

Yellow phosphorus offer record high

According to Longzhong Information data, on September 16, the quotations of yellow phosphorus enterprises were concentrated at 38,000-40,000 yuan/ton. In the morning, the new order was closed at 36,000-38,000 yuan/ton. In the afternoon, the sporadic new unit price was as high as around 40000 yuan/ton, and the price repeatedly hit new highs. At the same time, some enterprises are not exported at low prices.

According to the dynamic display of a number of commodity information agencies, Guizhou Xintianxin Phosphorus Industry, Kaiyang Phosphorus Chemical Industry, Wengfu Group, Sichuan Blue Ocean Chemical Industry, Sichuan Chuantou and other enterprises have suspended quotations, while a few enterprises such as Yunnan Metallurgical Steel have actually talked about yellow phosphorus.

Longzhong Information Phosphorus Chemical Analyst told Caixin that Yunnan's production capacity accounts for more than 45% of the domestic production capacity. Among other major producing areas, Hubei and Sichuan have relatively high self-use and domestic sales. Guizhou has a low operating rate due to the inspection requirements. Therefore, the production and sales of yellow phosphorus are concentrated in Yunnan.

According to the research report of Guojin Securities, yellow phosphorus belongs to the "three high" industry, with high pollution, high energy consumption and high emissions. In production, the power consumption per ton of yellow phosphorus exceeds 14000 kWh. In addition, the yellow phosphorus industry usually starts significantly higher during the flood season, with overall production in the second half of 2020 accounting for more than 60% of annual production.

According to industry insiders, due to the strict control of energy consumption, the suspension and production reduction were not carried out at the same time. Some enterprises received a notice to stop production from September 15 to October 15. The follow-up construction situation is still to be discussed, and the rest of the enterprises are still waiting for the notice.

A new round of price hikes is imminent

Yellow phosphorus is located in the middle of the phosphorus chemical industry chain, the reason for the price rise in addition to the tightening of the supply side, the downstream just need to support the role of the same significant. Phosphate rock downstream can be roughly divided into wet phosphoric acid and thermal phosphoric acid process, the downstream is mainly fertilizer, fire retardant, as well as electronic grade, industrial grade phosphoric acid.

Take glyphosate and flame retardants, both of which are downstream products of yellow phosphorus. The staff of the Securities Department of glyphosate manufacturer Xin 'an Co., Ltd. told Caixin that there was no problem in the procurement of yellow phosphorus. There were other procurement channels besides Yunnan, and the cost change would eventually be reflected in the price increase of glyphosate.

Morninghua shares have a total flame retardant capacity of 34800 tons/year. The company said on September 16 that the fluctuation of yellow phosphorus will lead to the fluctuation of the company's raw material phosphorus oxychloride, and the sales pricing of the company's products will usually be adjusted in time according to the comprehensive factors such as raw materials and market supply and demand.

Longzhong Information Phosphorus Chemical Analyst told Caixin News Agency reporters that the reduction of yellow phosphorus production has led to difficulties in snatching goods. Many enterprises are facing the situation of out of stock. Enterprises that can afford high prices can appropriately open some production lines, while enterprises that cannot afford it need to face the situation of suspending production and reducing production. As yellow phosphorus began to continue to rise in early September, considering that there is room for transmission of raw material price increases, downstream enterprises are basically dominated by orders already signed in the previous period, with very few new orders being sold.

Therefore, the industry predicts that after the upstream raw material market stabilizes and becomes clear, a new round of price increases in the phosphorus chemical industry may come soon.

Continued shortage of industrial grade phosphoric acid

It is worth noting that the thermal phosphoric acid is greatly affected by yellow phosphorus, and the production of phosphoric acid has become an inevitable trend. According to the business news agency, the average price of phosphoric acid was 7816.67 yuan/ton last Tuesday and 9400 yuan/ton on Tuesday. The price rose by 20.26 per cent during the week, and downstream purchases were still cautious. At present, the price of raw materials, cost support, is expected in the short term phosphoric acid market or continue to rise.

Due to the iron phosphate market hot, many fertilizer enterprises into the iron phosphate industry. According to relevant research reports, according to the price situation in the first half of 2021, the complete cost of fully integrated production of iron phosphate by phosphorus chemical enterprises can be as low as 6684 yuan/ton. Under the condition of outsourcing all raw materials, the complete cost of iron phosphate can reach 9907 yuan/ton. The difference between the two is 3223 yuan/ton. According to the average market price of iron phosphate in the first half of 2021, the corresponding net profit per ton is 3095 yuan and 678 yuan/ton respectively, the gap between the two is 2417 yuan/ton.

In the capital market, phosphoric acid industry chain companies also ushered in a period of high prosperity. Since this week, six countries chemical (600470.SH) has recorded four days of three boards, up nearly 40%. Company sources told Caixin News Agency reporters that the current market iron phosphate is in short supply, the average price of the company's iron phosphate products in 15000 yuan/ton, mainly to supply large single customers.

In addition, enterprises with phosphate rock resources are also favored. The subsidiaries of Silte (002538.SH), Guizhou Lufa and Guizhou Zhengli, have an annual mining capacity of 1.2 million tons of phosphate rock. In the stock price, the company rose 20% from September 13 to 16.

However, industry analysts believe that from lithium iron phosphate batteries, there is still a structural shortage of phosphate rock resources. It is understood that although my country is rich in phosphate rock resources, it is dominated by low-grade ore, and high-grade phosphate rock resources are scarce. In recent years, under the influence of environmental protection, safety production rectification and shutdown, there are also more companies that have gradually shut down and eliminated.

Therefore, after considering the difficulty of the purification process and other reasons, the shortage of industrial grade phosphoric acid and its downstream may be even greater. Longzhong Information Phosphorus Chemical Analyst told Caixin News Agency that power batteries need high-purity industrial monoammonium with a purity of more than 95 and industrial grade phosphoric acid with a purity of 85. At present, due to immature technology, difficult to deal with impurities and other reasons, it is difficult to reach the level of new energy.