On April 24th, Hua Xiaoxi, secretary general of the Phosphorus Chemical Sub-committee of China Inorganic Salt Industry Association, told reporters that the phenomenon of phosphate companies blindly expanding their production capacity and competing to export low-end products has become very serious. Over time, phosphate companies will face a serious development crisis.
Hua Xiaoxi said that in 2006, the export of phosphoric acid in China's main phosphate products was 580,000 tons, an increase of 25% compared with the same period in 2005, and that of sodium tripolyphosphate was approximately 500,000 tons, which represented an increase of 12% over the same period of last year. According to the current production situation of some enterprises, the total export volume of these products will continue to expand this year.
“The current phosphate export situation is much less worrying, because the main raw material used in this industry yellow phosphorus is of strategic significance.†Hua Xiaoxi said that after the 1970s, Europe and the United States, Japan and other developed countries from the protection of domestic resources and the environment From the perspective of implementing the strategy of transferring the phosphate industry to developing countries with phosphate resources, Rhodia Corporation, which has a large investment in China, is one of them.
With the stimulation of foreign investors, there has been a trend of blind expansion of phosphate companies in China. Gao Baoqing, a deputy general manager of Xuzhou Runjia Dongfang Chemical Co., Ltd., who is engaged in phosphate production and research for more than 30 years, and a member of the board of the Phosphorus Chemicals Branch of the China Inorganic Salt Industry Association believes that the increase in production capacity of phosphate companies this year is very rapid. For example, Yunnan Nanyang Group recently put into production 50,000 tons of industrial sodium tripolyphosphate, Sichuan Tianyuan Co., Ltd. will also expand the production capacity of sodium tripolyphosphate to 200,000 tons on the basis of the current scale of 40,000 tons. Chongqing Chuandong Chemical Group also wants to expand production capacity, while most of the eastern companies also implement capacity expansion. This expansion of the phosphate business will inevitably lead to a price war. According to Gao Baoqing, between 2003 and 2004, the market price of yellow phosphorus was once soared to as high as RMB 20,000 per ton, making the production capacity of yellow phosphorus rapidly expand from 800,000 tons to 2 million tons. The sharp increase in production capacity caused the price of yellow phosphorus to plummet, eventually falling to below 10,000 yuan, resulting in a loss-making operation of the entire industry. Phosphate companies are now facing the danger of repeating the same mistakes.
While the company's production capacity has expanded on a large scale, there has been no simultaneous expansion of domestic market demand. The remaining products only seek foreign markets, and many companies compete to lower prices in order to seek balance between production and sales. For example, in the international market, the average selling price of yellow phosphorus is 13,000 yuan per ton, while that of Chinese companies only sells 1 million yuan.
“Phosphate products are resource-based products, and domestic companies are squeezing the international market. This way not only loses the company’s profits, but more importantly, it is a waste of China’s precious yellow phosphorus resources because the current phosphate companies’ exports A very low value primary product," said Hua Xiaoxi. Although China is the third largest phosphate depositor after Morocco and the United States, there are many poor mines and few rich deposits, and more than 24% of the reserves account for only about 20% of total reserves. Phosphorus is a non-renewable, irreplaceable and scarce resource. Exports are a great waste of resources. "This will not only cause trade protection for the product in the international market, but more importantly, it also contradicts the state's policy of restricting the export of resource-based products."
"If you do not change this mode of development, domestic phosphate companies will face double pressure at home and abroad." Many corporate leaders and industry experts have expressed such concerns to reporters.
In response to the current grim situation facing phosphate companies, industry experts suggest that on the one hand, the relevant state departments should take administrative and taxation measures, appropriately adjust the total export volume, curb exports, thereby changing the supply and demand relationship in the international market, and promote price return; On the one hand, phosphate companies must change their development models, abandon the blind production of low-end products, actively promote industrial upgrading, develop toward fine chemicals, and produce and export high value-added products such as food grade, pharmaceutical grade, and electronic grade.
Hua Xiaoxi said that in 2006, the export of phosphoric acid in China's main phosphate products was 580,000 tons, an increase of 25% compared with the same period in 2005, and that of sodium tripolyphosphate was approximately 500,000 tons, which represented an increase of 12% over the same period of last year. According to the current production situation of some enterprises, the total export volume of these products will continue to expand this year.
“The current phosphate export situation is much less worrying, because the main raw material used in this industry yellow phosphorus is of strategic significance.†Hua Xiaoxi said that after the 1970s, Europe and the United States, Japan and other developed countries from the protection of domestic resources and the environment From the perspective of implementing the strategy of transferring the phosphate industry to developing countries with phosphate resources, Rhodia Corporation, which has a large investment in China, is one of them.
With the stimulation of foreign investors, there has been a trend of blind expansion of phosphate companies in China. Gao Baoqing, a deputy general manager of Xuzhou Runjia Dongfang Chemical Co., Ltd., who is engaged in phosphate production and research for more than 30 years, and a member of the board of the Phosphorus Chemicals Branch of the China Inorganic Salt Industry Association believes that the increase in production capacity of phosphate companies this year is very rapid. For example, Yunnan Nanyang Group recently put into production 50,000 tons of industrial sodium tripolyphosphate, Sichuan Tianyuan Co., Ltd. will also expand the production capacity of sodium tripolyphosphate to 200,000 tons on the basis of the current scale of 40,000 tons. Chongqing Chuandong Chemical Group also wants to expand production capacity, while most of the eastern companies also implement capacity expansion. This expansion of the phosphate business will inevitably lead to a price war. According to Gao Baoqing, between 2003 and 2004, the market price of yellow phosphorus was once soared to as high as RMB 20,000 per ton, making the production capacity of yellow phosphorus rapidly expand from 800,000 tons to 2 million tons. The sharp increase in production capacity caused the price of yellow phosphorus to plummet, eventually falling to below 10,000 yuan, resulting in a loss-making operation of the entire industry. Phosphate companies are now facing the danger of repeating the same mistakes.
While the company's production capacity has expanded on a large scale, there has been no simultaneous expansion of domestic market demand. The remaining products only seek foreign markets, and many companies compete to lower prices in order to seek balance between production and sales. For example, in the international market, the average selling price of yellow phosphorus is 13,000 yuan per ton, while that of Chinese companies only sells 1 million yuan.
“Phosphate products are resource-based products, and domestic companies are squeezing the international market. This way not only loses the company’s profits, but more importantly, it is a waste of China’s precious yellow phosphorus resources because the current phosphate companies’ exports A very low value primary product," said Hua Xiaoxi. Although China is the third largest phosphate depositor after Morocco and the United States, there are many poor mines and few rich deposits, and more than 24% of the reserves account for only about 20% of total reserves. Phosphorus is a non-renewable, irreplaceable and scarce resource. Exports are a great waste of resources. "This will not only cause trade protection for the product in the international market, but more importantly, it also contradicts the state's policy of restricting the export of resource-based products."
"If you do not change this mode of development, domestic phosphate companies will face double pressure at home and abroad." Many corporate leaders and industry experts have expressed such concerns to reporters.
In response to the current grim situation facing phosphate companies, industry experts suggest that on the one hand, the relevant state departments should take administrative and taxation measures, appropriately adjust the total export volume, curb exports, thereby changing the supply and demand relationship in the international market, and promote price return; On the one hand, phosphate companies must change their development models, abandon the blind production of low-end products, actively promote industrial upgrading, develop toward fine chemicals, and produce and export high value-added products such as food grade, pharmaceutical grade, and electronic grade.
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