Hubei Xingfa foresees a profit down in H1 2013

Keyword: Xingfa, phosphorus, market price, phosphorus mining
Publish time: 19th June, 2013      Source: CCM
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  On June 3rd, 2013, Hubei Xingfa Chemicals Group Co., Ltd. (Hubei Xingfa) reported it expects to report a 30–50% decline in net profit in the first half of 2013, compared to USD25.66 million of net profit in H1 2012, according to CCM’s Phosphorus Industry China Monthly Report issued in June.
  Hubei Xingfa attributed the expected profit drop to the following three points:
  Firstly, the market price of phosphorus ore is declining while the cost of phosphorus mining is rising.
  Secondly, electricity costs have risen sharply because of drought. Hubei Xingfa gets most of its electricity from hydropower it owns. But drought has caused Hubei Xingfa to buy more electricity from more expensive outside sources than last year to maintain production.
  Thirdly, the company's newly launched 600,000t/a DAP project has suffered losses. The project came on stream at the end of 2012, and is operated by wholly owned subsidiary Yidu Xingfa Chemical Co., Ltd. (Yidu Xingfa). Obviously, Hubei Xingfa overestimated the tendency of phosphate fertilizer market.
  Hubei Xinfa's performance reflects the status of China's entire phosphorus chemical industry. While phosphorous ore business has been highly profitable in recent years, margins of the phosphorus chemical industry are getting thinner as gloominess in the downstream phosphate fertilizer market spread to the upstream phosphorus ore market. New projects face a tough time generating profitability, and the profit margin of phosphorus manufacturing firms in the entire industry is being squeezed.
  Table of Contents of Phosphorus Industry China Monthly Report 1306:
  Editor's Note
  Headlines of Phosphorus Industry China Monthly Report 1306
  Phosphorus Ore
  Yuntianhua completes asset reorganization
  Hubei Xingfa foresees a profit down in H1 2013
  Yellow phosphorus
  Yunnan publishes energy consumes across local yellow phosphorus industry
  Phosphate Fertilizer
  CPFIA to work out schemes for weeding out excess phosphate fertilizer capacity
  Rapid appreciation of RMB to aggravate China's phosphate fertilizer export
  Investment on fertilizer project went up in Q1 2013
  Fine Phosphate Chemicals
  Phosphorus flame retardant foresees huge growth potential
  Global Insight
  Saudi Arabia breaks into China's phosphate fertilizer market
  Brief News
  Guizhou Province to launch Technology Roadmap for local phosphorus chemicals industry
  Jinchang City to construct a sulfur-phosphorus industrial park
  China to make rules for stacking phosphogypsum
  Supply & Demand
  Market review of prime phosphate chemical in May 2013
  Import & Export
  International trade of phosphate chemicals in April 2013
  Price Update
  Price monitoring of some phosphate chemicals in May 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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