中国磷化工月报

In Oct. 2014, although China’s phosphorus chemical market has come to the selling season, the markets for most of phosphorus chemicals are weak. Nevertheless, China’s export market of phosphate fertilizer encounters a peak period. 

In early Oct. 2014, India’s intensive purchase of Chinese phosphate fertilizers helps China’s phosphate fertilizer export market usher in a rapid growth, where the price always lingers at a high level. However, on 15 Oct., 2014, as both China’s window period for chemical fertilizer exports and its autumn fertilizer stocking came to a close, overseas and domestic demand for fertilizers declined at the same time. Therefore, before the arrival of the new peak season of fertilizer stocking, China’s phosphate fertilizer market will confront a great downward pressure in later period.      

Reviewing the upstream markets of phosphorus ore and yellow phosphorus, the operating rates of mining enterprises who were affected in early rainy season were improved. Due to the arrival of the normal period, yellow phosphorus manufacturers encountered a small rise in their production cost along with the rising price for electricity. However, the depressed downstream market of yellow phosphorus limits the price of yellow phosphorus to go up further, directly causing a sluggish sales of yellow phosphorus.      

In the face of the complicated market environment, the Chinese government and enterprises have made perspective and strategic decisions. Regarding the Chinese government, its will to cancel the VAT for chemical fertilizers has become burning issue in the chemical fertilizer industry in Sept.-Oct. 2014. Through a comprehensive consideration, CCM is of the opinion that the cancellation of preferential policy of VAT does good to phosphate fertilizer industry since the Chinese government can take advantage of the hand of market to push the industrial reform and innovation. Meanwhile, in order to streamline administration, delegate power to the lower levels and advance the marketization of management and investment in chemical fertilizer industry, the State Council canceled the approval of chemical fertilizer investment project and turned it into records management. Besides, the approval of chemical fertilizer offshore projects was canceled as well. Regarding Chinese enterprises, they strengthen efforts on project investment and their resource integration and give their scale and synergistic effects a full play.

The RMB/USD exchange rate in this issue is USD1.00=RMB6.1493 on 8 Oct., 2014, sourced from the People's Bank of China.

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