Driven by tight upstream supply and strong downstream demand, the prosperity of phosphorus chemical products has continued to rise this year. According to Baichuan Information, the current price of phosphate rock is 500 yuan/ton, an increase of 35% from 370 yuan/ton at the beginning of the year; the prices of monoamine phosphate and diamine phosphate are 3,020 yuan/ton and 3,050 yuan/ton, respectively. Both are more than 2,000 yuan per ton. In addition, the average price of lithium iron phosphate was 51,000 yuan/ton, an increase of nearly 46% from the beginning of the year.

"The increase in the price of main products will help strengthen the company's performance." Recently, a number of listed phosphorus chemical companies said on the investor interaction platform.

Industrial chain integration enterprises have obvious advantages

The phosphorus chemical supply side has been tight in the past two years. According to industry insiders, in response to the serious pollution of the "three phosphorus" industry, the state has introduced a series of policies and measures since 2019 to regulate or shut down the phosphorus chemical production capacity, resulting in the overall tightness of the phosphorus chemical supply side.

On the demand side, the downstream demand of phosphate rock is strong, and the price of phosphate chemical products such as phosphate fertilizer is high, which enhances the ability of relevant enterprises to accept high prices of phosphate rock. Take diammonium phosphate as an example. Since the beginning of this year, international prices have been running at a high level, and export orders have continued to rise. Among them, the export volume in May was about 930,000 tons, an increase of 104% month-on-month and an increase of about 247% year-on-year.

The phosphorus chemical industry chain includes upstream phosphate ore mining, downstream fine chemicals and phosphate fertilizer product production. Yuntianhua, Xingfa Group, Chuanfa Lomon and other listed companies with integrated industrial chains have obvious advantages.

As one of the largest phosphate mining and dressing enterprises in China, Yuntianhua has a production capacity of 14.5 million tons of phosphate ore raw ore and is a leading enterprise in the domestic phosphorus chemical industry. The company has a total production capacity of 8.81 million tons of fertilizers, including 4.45 million tons of diammonium phosphate, 700,000 tons of monoammonium phosphate, and 500,000 tons of feed-grade calcium hydrogen phosphate.

A few days ago, Yuntianhua stated on the investor interaction platform that it will formulate a reasonable pricing strategy in accordance with market changes and closely follow the market rhythm. According to Huaxi Securities' calculations, every time the price of monoammonium phosphate/diammonium phosphate rises by 100 yuan/ton, the company's profits will increase by 438 million yuan, and its performance is extremely flexible.

In addition, Yuntianhua is gradually expanding the application fields of high-grade phosphoric acid and extending the industrial chain. In 2020, the company and Duo Fluoride will establish a joint venture, Yunnan Fluoro Phosphor Electronic Technology Co., Ltd., as a platform for the two parties to carry out cooperation on the comprehensive utilization of phosphate fertilizer by-product fluorosilicon resources. Black, lithium hexafluorophosphate, electronic grade hydrofluoric acid production equipment and supporting facilities are planned to be completed in 2022.

Xingfa Group took the lead in building an integrated industrial chain of phosphate, mineral and electricity in China. In terms of phosphate rock resources, the company has mining rights to produce more than 5 million tons of phosphate rock. In terms of downstream products, the company's yellow phosphorus production capacity exceeds 160,000 tons/year, and fine phosphate production capacity is about 180,000 tons/year. It is one of the most complete companies in the country with the finest phosphorus products category. At the same time, the company also has a variety of phosphorus chemical products such as 180,000 tons of glyphosate and 600,000 tons of ammonium phosphate.

Previously, Xingfa Group stated on the investor interaction platform that the increase in the price of phosphate fertilizer would help strengthen the company’s performance. It is understood that at present, the company's wholly-owned subsidiary Yidu Xingfa's 3 million tons/year low-grade collophane ore beneficiation and deep processing project has been in the trial operation stage. When the production and effectiveness are reached, the company's sulfuric acid production capacity will increase from the current 800,000 tons. The ton/year is increased to 2 million tons/year.

Chuanfa Lomon is the world's largest industrial-grade monoammonium phosphate manufacturer with the largest production and sales volume and the largest domestic export volume. The export volume accounts for more than 50% of the total domestic exports. In March this year, the company completed its non-public offering to Chuanfa Mining, raising a total of 1.97 billion yuan. Chuanfa Mining's shareholding ratio in the company reached 21.87%, becoming the company's controlling shareholder. At present, Tianrui Mining, a subsidiary of Chuanfa Mining, holds the Mabian Phosphate Mine, which will help the company's upstream integration. It is reported that the company's Xiangyang Base Baizhu Phosphate Mine with an annual output of 1 million tons of phosphate ore production scale has been basically completed, the mine acceptance has been completed, and the formal production has begun. If there is surplus after reaching the production capacity, some of the surplus phosphate products will be sold. Recently, the company said on the investor interaction platform that the company's industrial ammonium phosphate has been sold as a precursor of the lithium iron phosphate lithium battery cathode material.

Many listed companies deploy iron phosphate

As the raw material of lithium iron phosphate, iron phosphate is also a hot phosphorous chemical product during the year. Since 2020, the market share of lithium iron phosphate batteries in China's power battery market has begun to increase. According to data from the China Automobile Association, my country's power battery installed capacity in May was 9.8GWh, an increase of 178.2% year-on-year, of which the proportion of lithium iron phosphate batteries in May rose to 63.6%, an increase of 317.3% year-on-year.

On the evening of June 17, Tinci Materials announced that it agreed to establish a joint venture company to invest in the construction of the "Iron Phosphate Project (Phase I) with an annual output of 300,000 tons", with a total investment of 504 million yuan. The company believes that iron phosphate is the core raw material for the production of lithium iron phosphate. At present, due to the rapid increase in demand for lithium iron phosphate and the rapid increase in production capacity, there is a gap in iron phosphate production capacity. The implementation of the project is the company's capacity expansion in order to meet the market's future demand for iron phosphate. After the completion of the project, it will help the company seize market development opportunities, expand the scale of production and operation, and improve market competitiveness.

It is worth noting that, because titanium dioxide by-product ferrous sulfate can be used as a raw material for iron phosphate, in recent years, especially this year, many titanium dioxide companies have increased or deployed the track.

Recently, Ananda announced that its holding subsidiary Tongling Nayuan intends to introduce Hunan Yuneng as a strategic investor, and establish a joint venture company to focus on the production and operation of iron phosphate, and the joint venture will invest in the construction of a 50,000 tons/year high-pressure iron phosphate industry. After the expansion, the company’s iron phosphate production capacity will increase to 100,000 tons/year. Hunan Yuneng just completed the capital increase and share expansion in December last year. CATL and BYD are among the shareholders of the capital increase.

Since the beginning of this year, China Nuclear Titanium Dioxide has obvious intentions to deploy in the new energy field. On May 24, the company issued an announcement stating that it plans to raise an additional 7.09 billion yuan for the deep processing project of recycled titanium dioxide, the water-soluble monoammonium phosphate (water-soluble fertilizer) resource recycling project, the project with an annual output of 500,000 tons of iron phosphate and supplementary flows 4 projects including funding. Among them, the investment in the iron phosphate project with an annual output of 500,000 tons accounted for nearly half of the total amount of funds raised this time. The project uses ferrous sulfate, a by-product of titanium dioxide, as the raw material for the production of ferric phosphate, combined with the company's unproduced water-soluble monoammonium phosphate (water-soluble fertilizer) to produce ferric phosphate, which can greatly reduce the production cost of ferric phosphate.

In February of this year, Lomon Baili announced that its wholly-owned subsidiary Henan Baili New Energy Materials Co., Ltd. planned to invest 300 million yuan to establish Henan Longbai New Material Technology Co., Ltd. in Qinyang City, Henan Province. The relevant person in charge of the company once said in an interview with reporters: "The production process of lithium iron phosphate in this project is self-developed. The products produced by the laboratory have good overall performance, low manufacturing costs, and significantly improved cycle performance."