Supply reduction, downstream increase, yellow phosphorus prices steadily rise　

Since the beginning of this year, the yellow phosphorus market has steadily increased
.

As of July 30, the mainstream price of yellow phosphorus was 27,700 yuan (ton price, the same below), an increase of 75% from 15,800 yuan at the beginning of the year

Decrease in phosphate rock resources

Decrease inphosphate rock resourcesdecline in phosphate rock resources

China's phosphate rock reserves are about 3.

7 billion tons, accounting for 5.
52% of the global phosphate rock reserves, ranking third in the world

Due to the serious pollution and small chaos in the domestic phosphate mining and downstream phosphorus chemical industry, the "three phosphorus" environmental protection measures have become stricter since 2016.
In 2019, the Ministry of Ecology and Environment issued the "three phosphorus improvement" action plan.
In the environmental protection zone, phosphate mine limited mining and rectification and mine safety production rectification have begun, and some phosphate ore enterprises have reduced production or closed permanently
.

Under strict environmental protection policies, the output of phosphate rock has dropped from 144 million tons in 2016 to about 89 million tons in 2020
.

As supply continues to shrink and demand is improving, domestic phosphate ore prices have stabilized after the Spring Festival this year

Limited capacity release

Restricted capacity release Restricted capacity release

　　Starting from May, Yunnan, the main yellow phosphorus producing area in China, has experienced drought and little rain, and the main reservoir has been overdrafted, and power generation has seriously fallen short of expectations.
Various states have begun emergency peak-shift rationing on power users
.

The production of yellow phosphorus enterprises, which are large consumers of electricity, has been greatly affected.

　　According to data from the Business Society, the average price of Yunnan yellow phosphorus on May 10 was 17,700 yuan, and on June 8, the average price was 24,500 yuan, an increase of nearly 40%
.

The price in Hubei also reached 25,000 to 27,000, and has remained in this high area ever since

　　Unexpectedly, since July 13th, Yunnan has implemented a new round of power curtailment policies, and most enterprises have begun to reduce their load, the operating rate has quickly dropped to 27%, and the daily output of yellow phosphorus is only about 500 tons
.

The orders that have been signed in the previous period cannot be delivered on time, the order execution period is extended, the space for receiving new orders is limited, and the spot is hard to find

　　Wanlian Securities analyst Huang Kan believes that it is not clear when the power rationing in Yunnan will end, and the impact of Sichuan's environmental protection and production restrictions is superimposed.
It is expected that the domestic yellow phosphorus price will run at a high level in the short term
.

　　Downstream demand growth

　Downstream demand growth　downstream demand growth

　　Mainly for the production of yellow phosphorus acid, glyphosate, phosphorus trichloride, phosphorus pentasulfide and the like
.

Among them, the demand for phosphoric acid accounted for 46%, glyphosate accounted for 26%, and phosphorus trichloride accounted for about 15%

　　From the perspective of the phosphoric acid industry, in recent years, phosphoric acid production capacity has decreased, with total production capacity falling from 4.
34 million tons in 2017 to 3.
52 million tons in 2021, driving the price of phosphoric acid to rise sharply
.

Beginning in mid-May this year, prices have risen by nearly 40% in the past month, and enterprises have increased their production enthusiasm, which has led to an increase in the demand for yellow phosphorus
.

　　From the perspective of the glyphosate industry, since 2020, the continued global extreme weather and the new crown pneumonia epidemic have exacerbated the instability and uncertainty of the food supply system, and food security has received more attention
.
Since the beginning of this year, with the gradual recovery of the global economy and chemical terminal demand, environmental protection supervision in some industries has become increasingly stringent, small and medium-sized backward production capacity has begun to withdraw, and the market for glyphosate, the largest pesticide export product, has been operating strongly
.
At present, the price of 95% glyphosate raw powder has more than doubled from the beginning of the year, and hit a 10-year high, which has further boosted the demand for yellow phosphorus
.

　　In addition to the growth in demand for yellow phosphorus from the above-mentioned traditional industries, the demand from emerging industries has also played a role in boosting the rise of the yellow phosphorus market
.
The rapid growth of the new energy automobile industry has driven the application of lithium iron phosphate in battery systems to a large extent
.
A number of high-quality pure electric models using lithium iron phosphate have been launched, and the proportion of lithium iron phosphate batteries has begun to increase.
The installed capacity of lithium iron phosphate increased to 41% in the first May of this year, which also supported the rise in the price of yellow phosphorus
.