The net profit of 4 companies increased by more than 150%!

Recently, a number of phosphorus chemical listed companies have handed over beautiful first quarter reports, and the net profit of the four companies has increased by more than 150% year-on-year
.
In the first quarter, Yuntianhua realized a net profit of 1.
646 billion yuan, a year-on-year increase of 186.
15%; Xingfa Group realized a net profit of 1.
723 billion yuan, a year-on-year increase of 384.
07%; Hubei Yihua realized a net profit of 638 million yuan, a year-on-year increase of 200.
65%; Yuntu Holdings realized The net profit was 465 million yuan, a year-on-year increase of 157.
59%
.

"The demand for the left hand is strong, and the resources for the right hand are scarce.
" For the market outlook, the industry generally predicts that the high prosperity of the phosphorus chemical industry will remain
.

Agricultural demand is strong

"The main reason for the continued high prosperity of the phosphate chemical industry is the tight supply and demand of phosphate fertilizers and the rising prices
.
" Zhang Xiaorong, president of the Deepin Science and Technology Research Institute, believes
.

Since last year, the phosphate fertilizer market has entered a rising channel
.
As of May 6, the reference price of monoammonium phosphate was 3,920 yuan (ton price, the same below), up 85.
2% from the beginning of last year; the reference price of diammonium phosphate was 3,725 yuan, up 52.
66% from the beginning of last year
.

The current domestic phosphate fertilizer prices remain high, mainly due to the continued rise in global food prices
.
The farmers' enthusiasm for farming has increased, which is beneficial to the demand for products such as fertilizers
.
More importantly, under the expectation of the food crisis, the demand for phosphate fertilizer will be stronger in the market outlook
.

On May 6, a report released by the Global Network for Response to Food Crises showed that the level of sudden food insecurity reached a new high
.
Conflicts in Russia and Ukraine and rising oil prices have led to rising fears of a global food crisis, and prices of basic crops ranging from wheat to corn have continued to set new records
.
On May 6, the domestic price of wheat was 3,186 yuan, up 316 yuan from the beginning of February; the price of corn was 2,802 yuan, up 129.
14 yuan from the beginning of February
.

The increase in food prices has increased the willingness of domestic farmers to plant
.
According to the forecast of relevant institutions, China's grain sown area is expected to reach 1.
77 billion mu this year, an increase of 267 million mu compared with 2021
.
The large-scale increase in grain production will strongly promote the market demand for agricultural products such as fertilizers and pesticides, and phosphorus chemical companies that are deeply involved in phosphate fertilizers and phosphorus-containing pesticides will benefit greatly
.

Zhao Naidi, an analyst at Everbright Securities, believes that the current international phosphate fertilizer prices remain high
.
With the gradual loosening of export restrictions on domestic phosphate fertilizers and phosphate chemical products, leading enterprises are expected to enjoy the dividend of domestic and foreign price differences to expand their export share, and at the same time, it will also drive the price of ammonium phosphate and other phosphate chemical products in China to rise
.

New energy becomes a new outlet

Lithium iron phosphate and ternary lithium batteries are the "double heroes" in the field of domestic new energy vehicle power batteries
.
Due to its low cost and high safety, lithium iron phosphate batteries have become the mainstream technical route of power batteries
.
According to data from the Power Battery Application Branch, the installed capacity of lithium iron phosphate batteries in 2021 will account for 51.
2% of the market, which has surpassed that of ternary lithium batteries
.

According to different production processes, the production of 1 ton of lithium iron phosphate theoretically requires 0.
5 to 0.
65 tons of phosphorus resources
.
Under the background of "double carbon", benefiting from the strong demand for power batteries from new energy vehicles, the industrial chain of "phosphate rock-yellow phosphorus-phosphoric acid-iron phosphate" is in a situation of tight supply, and the market for the phosphorus chemical sector has room for growth.
It has been fully opened, and the upstream and downstream of the industrial chain will continue to resonate
.

In fact, leading phosphorous chemical companies have begun to deploy the lithium battery industry
.

In October 2021, Hubei Yihua announced that it has reached a cooperation intention agreement with Ningbo Bangpu Times.
The two parties will cooperate on iron phosphate, nickel sulfate and its front-end phosphate rock, phosphoric acid, sulfuric acid and other chemical raw materials
.
Two months later, Guizhou Phosphate Group and Ningde Times Battery Industry Cooperation Project held a groundbreaking ceremony, which started simultaneously in Kaiyang, Xifeng and Fuquan bases
.
Yuntianhua also mentioned in its 2021 financial report that it will accelerate the construction of 500,000 tons/year of iron phosphate and its supporting facilities
.
It is reported that the first phase of the 100,000-ton/year project is expected to be completed by the end of June this year, and the products will be produced by the end of August
.

The future development direction of these listed phosphorus chemical companies is aimed at the new energy track, which is expected to bring about incremental performance
.

Scarcity of resources raises costs

Phosphate rock, the source of the phosphate chemical industry chain, is a non-renewable strategic resource, and its scarcity will also help the industry chain maintain a high degree of prosperity
.

On the one hand, due to the non-renewable nature of phosphate rock, the ratio of reserves to production has declined year by year, and rich ore resources have gradually been depleted.
Phosphorus resources need to be protected by reducing the amount of mining; on the other hand, over the years, some backward production capacity management of phosphate rock and downstream fertilizer Extensive, more serious environmental pollution
.
In recent years, China has gradually increased safety and environmental protection control measures, forcing some small and medium-sized phosphate mines that do not meet the standards to be further cleared
.

In this context, phosphate rock production has declined for five consecutive years
.
In 2016, the output of phosphate rock in China was 144 million tons.
In 2021, stimulated by the increase in the price of phosphate rock, the output will only reach 91 million tons despite an increase of 11.
22% over the previous year
.
Moreover, from the second half of last year, including Yuntianhua, Wengfu Group, Kailin Group and some enterprises in Hubei, no longer sell or substantially reduce the amount of phosphate rock sold, resulting in less phosphate rock circulating in the market
.

On April 7, the "Guiding Opinions on Promoting the High-quality Development of the Petrochemical and Chemical Industry during the "14th Five-Year Plan" issued by the Ministry of Industry and Information Technology, the National Development and Reform Commission and other 6 departments pointed out that the new production capacity of the industry including ammonium phosphate and yellow phosphorus should be strictly controlled
.
Industry insiders said that after the introduction of the national policy of restricting the upstream production capacity of phosphorus chemical industry, large-scale phosphorus chemical enterprises that have stopped selling phosphate rock to the outside world will be more reluctant to sell phosphate rock resources
.
With the increase in the price of phosphate rock, the price of the phosphate chemical industry, especially the downstream phosphate fertilizer, has also risen as a whole due to rising costs
.

On the whole, with strong downstream demand and rising upstream costs, the "two wheels" drive the phosphorus chemical industry to maintain a growth trend
.
Many phosphorus chemical companies are also actively extending the industrial chain, making sufficient efforts to increase the added value of phosphorus products, and striving to occupy a dominant position in the future economic cycle
.