CCM has recently published a new market intelligence report, covering the development of the phosphorus industry in China, one of the leading players in the market with large phosphorous rock reserves. The report analyses the situation of phosphorous rock as well as the most important downstream industries phosphate fertilisers and yellow phosphorous.
Phosphorous is a chemical element with downstream application scopes ranging from detergents, water treatment, flame retardants, batteries, chemical intermediates, and phosphorous fertilisers. Among them, the most important and leading industry with the highest demand for this mineral is the fertiliser industry.
Phosphate rock is the major raw material that is used for the phosphorous industry, where 71% of it is used to produce fertilisers, while another significant amount goes into yellow phosphorous as well as other phosphate chemicals.
At present, the global phosphorous market is being led by the Asia Pacific region owing to the high demand for the derivatives of phosphorous and flexible regulations and policies implemented by the governments in the region. The market for phosphorous is expected to rake in a significant share in emerging countries such as China and India. The USA is also one of the leading consumers of phosphorous, especially in the chemicals industry and flame-retardant manufacturers. The European market for phosphorous might benefit in the coming years due to the rising demand for electric car batteries, which are slowly going to replace gas-driven cars over the next decades. Vietnam, China, and the USA are the leading producers of phosphorous and its derivatives by now.
China has become one of the leading players in the phosphorous market recently after putting a lot of effort into the industry for the last decades. As a result, an almost complete industrial system for the industry has been established in the country, ranging from the mining of phosphate rock to the production of basic and fine phosphorous chemicals.
It is worth noticing, that the phosphate industry is facing severe competition nowadays, as many enterprises are trying to get their market share for the universal product with a wide scope of downstream applications. Phosphate products are part of the fine chemicals industry.
The P.R. China has already made significant achievements in the production technology of the material but is still lacking behind developed countries in terms of processing capability and quality.
The output of phosphate rock in China was increasing during 2011 to 2016 with an average annual growth rate of 13.52%. However, most of China’s phosphate rock output and reserves are Grade III phosphate rock. In 2016, the Grade I phosphate rock reserves in China accounted for less than 12% of the national total. The Chinese government was adjusting policies on phosphate rock mining in recent years, gradually closing the small and inefficient phosphate rock mines. The price of phosphate rock was on a downward trend since 2013.
The output of phosphate fertilizers in China was on an upward trend with fluctuations during 2011 to 2015 and reached the periodic peak of the last six years in 2015. However, the growth of phosphate fertilizer capacity and output has exceeded the growth of demand for phosphate fertilizers, which led to overcapacity and oversupply of phosphate fertilizers. The Chinese government encouraged phosphate fertilizer producers to reduce capacity in the recent two years, thus both the capacity and output of phosphate fertilizers had decreased in 2016 and would continue to decrease in the coming years.
Yellow phosphorus, as a main downstream product of phosphate rocks, is a very important basic industrial raw material. It is mainly used for the production of red phosphorous, phosphoric acids, phosphorous compounds, and various pesticides.
At present, the Chinese output of phosphate chemicals is the largest in the world, supported by a large number of local yellow phosphorus production plants. These plants are mainly located in the South West of China, including the provinces of Yunnan, Guizhou, Sichuan, and Hunan. As a result, the production capacity of yellow phosphorus in China is highly concentrated, with more than 80% is covered by the aforementioned four regions.
China is in urgent needs to manage its phosphorous consumption in a more efficient way, as the domestic reserves could be exhausted within the next 3 to 4 decades, if the country maintains its current production rate, according to a study by market researchers. China especially intensified its phosphorus mining during the last 60 years in order to feed the rapidly increasing populations and meet people's demand for agricultural products and meat.
According to the study, in 2012, China's annual phosphorus extraction reached 12.50 million metric tons, accounting for over 40 percent of the global phosphorus production. About 70% of this consumption was used to produce synthetic fertilizers in that time, and the numbers haven’t changed much to today.
About the article
A complete analysis of China’s phosphorous market can be found in the report Market Research on China Phosphorus Industry Edition (3).
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