Phosphorus chemical industry is an important chemical raw materials industry, its products include phosphoric acid, phosphate fertiliser, pesticides, phosphate, etc., widely used in agriculture, food, detergents, electronics and other fields. At present, the phosphorus chemical industry is transforming from the traditional fertiliser field to the field of new energy materials, especially as the new energy industry continues to boom, the share of electric vehicles in the global automotive market is gradually climbing, the demand for lithium iron phosphate and other lithium battery materials continues to grow, leading to the booming development of the phosphorus chemical industry.
Supply side: phosphate rock industry gradually upgraded, short-term structural shortage still exists
Phosphate ore is a kind of scarce mineral resources with non-renewability, which is an important economic mineral and strategic non-metallic mineral resources in China, and was listed in China's ‘strategic mineral catalogue’ in 2016. From the perspective of global phosphate ore reserves, North African countries Morocco phosphate ore reserves of 50 billion tonnes, accounting for 67.61% of the world, but the annual output of only 39 million tonnes, only 17.7% of the global production capacity, large reserves, less mining, rich resources. In contrast, China's phosphate rock reserves of about 3.8 billion tonnes, accounting for only 5.1% of the global reserves, however, in 2023, China's annual output is as high as 90 million tonnes, accounting for 40.9% of the total global production capacity, and the consumption of resources is very fast. At present, the storage and mining ratio of China's phosphate ore is only 42, far below the global average of 336.
Since 2017, China's mine safety supervision and environmental protection policies have been tightened, and phosphate rock production has been reduced, and the last two years have been mainly stable. According to MantaRay MantaRay research, the average annual production of domestic phosphate rock has been stable at around 100 million tonnes in the past three years, and the production of phosphate rock was 105 million tonnes in 2023, with a CAGR of 3.07% in the past five years, and it is predicted that China's phosphate rock production will be around 109 million tonnes in 2024. As of the end of 2023 the domestic phosphate rock capacity under construction/planning construction is 35.5 million tonnes, of which no new capacity will be put into production in 2024, 15.7 million tonnes of capacity is expected to be added in 2025, and the rest of the capacity will be put into production in 2026, and the compound growth rate of capacity in 2023-2025 will only be 3.97%.
As China's phosphate production faces industrial upgrading, it is gradually developing in the direction of large-scale intensive, intelligent and green mining. After years of development, China's phosphate ore resources are becoming increasingly impoverished, the stock of phosphate ore production decline, high-grade ore resources continue to consume, the overall grade of phosphorus ore declined significantly, the difficulty of mining, there is a certain supply contradiction. At the same time, 2022 years ago, China's phosphate rock is still mainly exported, less imported, but with the tightening of China's mineral rights concessions, the domestic is a structural shortage of minerals, 2023 China's phosphate rock imports increased significantly, 2024 January-April imports are much higher than the export volume, and has been more than 3/4 of the total imports of 2023, thus side by side confirms that the current domestic phosphorus ore is facing a short-term structural supply tight situation. The situation.
Demand: Rigid demand continues to grow, and new application areas continue to expand
From the perspective of downstream applications and consumption composition, currently more than 70% of phosphorus ore is used for the production of phosphate fertilisers (including monoammonium phosphate, diammonium phosphate and heavy superphosphate, etc.), and the rest is used for the extraction of yellow phosphorus to make phosphoric acid and other phosphate series products, which are mainly used in the fields of feed, phosphorus-containing pesticides, cleaning and washing, food, daily chemicals, new energy and other fields.
Phosphate fertiliser accounts for about 70% of the downstream of phosphate rock, which is the largest product in the phosphorus chemical industry, and the consumption of phosphate rock by phosphate fertiliser enterprises also ranks first in the industry. China is the largest phosphate fertiliser producer, with the combined output of monoammonium phosphate (MAP) and diammonium phosphate (DAP) accounting for about two-thirds of the world. In recent years, through the supply-side reforms to retire excess capacity, and by the safety and environmental protection inspection, part of the production capacity was cleaned up, phosphate fertiliser supply oversupply has been significantly improved, the industry capacity utilisation rate rebounded year by year.
As for the phosphorus chemical industry, glyphosate is a very important phosphorus-containing pesticide product and the largest herbicide species in the global market, which is very effective against perennial rooted weeds and is widely used in the agricultural field, especially in conjunction with glyphosate-tolerant genetically modified crops. In terms of international market, the glyphosate market is mainly distributed in North America, Europe and Asia. In North America, the United States is the largest consumer market, and its demand for glyphosate is steadily increasing. In Europe, the use of glyphosate is strictly regulated but remains the herbicide of choice for European farmers. In Asia, particularly in China and India, the development of agriculture and growing crop acreage has fuelled the growth of the glyphosate market. Benefiting from the growing agricultural sector and increasing demand for efficient and environmentally friendly pesticides, the glyphosate market is promising. According to the latest industry research report, since 2024, China's glyphosate market has shown a trend of growing demand and rising export expectations. Overseas orders for glyphosate are increasing one after another, downstream preparations are starting well, and inventory pressure is easing. Glyphosate market improved and price rebounded up. While the export rebounded, both cost and supply also played a supportive role for glyphosate price.
There is also lithium iron phosphate, lithium iron phosphate as a phosphate industry, a fast-growing ‘force’. It is mainly used in the production of lithium iron phosphate batteries, application terminals for new energy vehicles, energy storage and other industries, has the advantages of low cost, high cycle times, good security, environmentally friendly, etc. Since 2021, the rapid development of new energy vehicles and penetration, coupled with the end of the national subsidy before the demand driven by China's new energy vehicle production and sales of the two booming in 2023, respectively, to reach 9.587 million vehicles and 9.495 million, an increase of 35.83% and 37.87% year-on-year, respectively. growth of 35.83% and 37.87% respectively. Benefiting from the rapid development of the new energy vehicle industry, the output of lithium iron phosphate batteries continues to rise, growing to 531.4 GWh in 2023, an increase of 59.87% year-on-year.
It can be seen that the prospects for the development of the phosphorus chemical industry at the level of market demand seems to be positive, especially in the phosphate fertiliser, phosphate, new energy materials and other applications continue to expand and deepen, as well as the support of national policy and the industry's internal structural adjustment to promote, market demand is expected to continue to grow.
Phosphorus chemical industry development trend
Protective policies to improve resource utilisation and promote transformation of the industry for efficient use
As an important branch of the chemical industry, the phosphorus chemical industry has been strongly supported and guided by national policies in recent years, showing strong momentum of development. On the one hand, the state has promoted the supply-side structural reform in the phosphorus chemical industry, through the introduction of strict phosphorus ore production restriction policy, improve the industry access threshold, promote the elimination of backward production capacity, and promote the transformation of the industry to high-quality development. On the other hand, the release of the Implementation Plan for Promoting the Efficient and High-value Utilisation of Phosphorus Resources has clarified the systematic planning and top-level design for the protective exploitation of phosphorus resources and the innovative development of the phosphorus chemical industry, and put forward quantitative targets, path initiatives and key projects to enhance the sustainable guarantee capacity of phosphorus resources and the level of efficient and high-value utilisation. With the continued promotion of the policy, the phosphorus chemical industry is expected to continue to maintain the momentum of growth.
The industrial layout tends to be rationalised, and the product structure is transformed to high value-added.
After years of development, China's phosphorus chemical industry has developed from the primary phosphorus ore processing, which is mainly based on yellow phosphorus, into a modern phosphorus chemical industry dominated by deep processing of yellow phosphorus and phosphoric acid refinement. At the same time, with the improvement of the production level and the progress of industrial technology, the market demand for phosphorus chemical products has undergone a big change, from the original primary products gradually to the transition of fine chemical products, phosphorus chemical products show a diversified development trend.
Accelerate diversified transformation and build a green circular economy industry chain
China's phosphorus chemical enterprises in their own continuous development and growth at the same time, constantly seeking new development models, so that enterprises can be sustainable development. One of the main direction of development is to rely on local resources and location advantages, to build the phosphorus chemical recycling economy industry. Rational development and effective use of phosphate resources, moderate development of high concentration of phosphorus compound fertiliser, and vigorously develop the fine phosphorus chemical industry.
Source:CCM
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