LONDON, July 6, 2016 /PRNewswire/ -- At the end of May 2016, CCM took part in the 23rd China Phosphate Fertilizer Annual Meeting held in Beijing. At the meeting, the industry's gains and losses during 2011-2015 as well as opportunities and challenges in the near future have garnered great attention from experts and phosphate fertilizer enterprises.
On 27–28 May, 2016, China Phosphate Fertilizer Annual Meeting was held in Beijing. Phosphogypsum problem became one of the important topics. CCM believes that driven by domestic phosphorus chemical leading enterprises, the phosphogypsum industry is transforming from "focusing on storage" to "developing storage and utilisation simultaneously". However, it still takes some time before development of the whole industry becomes mature and large-scale.
In mid-June 2016, a rumour that the Li-ion battery separator products from Yuntianhua Newmi-Tech were applied to iPhone7 excited domestic investors. However, Yunnan Yuntianhua issued a clarification announcement, denying the rumour and it also disclosed that the company is still mainly engaged in mining, benefication and management of phosphorus ore, R&D, production and sales of chemical fertilizers and engineering materials and revenue from Li-ion battery separator business is still in a small proportion.
In June 2016, Shenzhen Batian said that it has received a written reply of approval of non-public offering. This means that the company will accelerate the construction of projects including new compound fertilizers, an online e-commerce platform and offline service stations. It will also enrich the product structure and improve business service level so as to enhance comprehensive strength and core competitiveness.
In June 2016, Guizhou Kailin reached a cooperation agreement with the Bank of Guiyang and Huachuang Securities. Specifically, it will receive a capital increase of over USD240 million from the Industry Investment Fund jointly founded by the latter two. CCM expects this to improve Guizhou Kailin's benefits and boost its development by significantly improving capital structure, enhancing financing capacity and reducing financing costs.
At the end of May 2016, Guizhou Kailin announced the success of the trial production of its Series I facility of its engineering project (the third phase) in Dashui Industry Park. The company is now vigorously carrying forward the construction of the Series II facility. Guizhou Kailin expects the project, mainly for phosphate fertilizers and fine phosphorus chemicals, to further optimize its product structure, improve the added value of its products and transform its resources advantages into economy advantages.
In June 2016, China's phosphorus ore market remains depressed. Hopefully, enterprises' burden may be relieved and the market is expected to maintain stable thanks to the full advancement of the resource tax reform recently, which is aimed at combining the resource tax with the market price (a reflection of the supply and demand relation) and establishing the automated tax regulation mechanism.
A draft of the environmental protection tax law is to be tabled for discussion in June 2016, according to the 2016 legislative agenda released by the Standing Committee of the NPC. This suggests that China will confirm the introduction of legislation imposing an environmental protection tax (in place of environmental protection charges). In addition, the coming law is expected to raise domestic phosphorus chemical enterprises' production costs, which is then expected to further accelerate the phasing out of outmoded production capacity.
In May 2016, China's phosphorus ore price remained low and this trend was very likely to continue in the short term due to insufficient demand from the depressed downstream yellow phosphorus and phosphate fertilizer markets.
In May 2016, China's phosphoric acid market continued to be sluggish and market price was still low. Considering that the downstream phosphate market would not recover soon and the export market was flat, CCM expected the market to remain sluggish in the short term.In June 2016, depression continues in Chinese phosphorus chemical market and there are no signs of improvement in market prices and operating rates of most products. Specifically:
Phosphorus ore: market is stagnant. Quotations from the four major production areas are quite stable. Manufacturers (especially in Guizhou and Sichuan provinces) begin to resume production because their inventories were basically run out.
Yellow phosphorus: market begins to show signs of improvement. Manufacturers begin to raise their operating rates but market price remains low.
Phosphoric acid: market continues to be sluggish. New orders are few and operating rate shows signs of decline.
STPP: market conditions remain stagnant and market price is quite stable. Considering that manufacturers' inventories are large and the upstream yellow phosphorus is on an upward trend, operating rate of STPP is expected to decline slightly.
MAP: market keeps falling. Usually in summer, high nitrogen fertilizers are the favourite in the Chinese fertilizer market. Transaction prices of MAP in most areas in the country fall slightly and many manufacturers suspend production for equipment maintenance in this slack season.
DAP: same as MAP, summer is a slack season for DAP. Transactions in the domestic market are mainly about orders previously signed. After improving their inventories, successive manufacturers suspend or cut production.
Notably, at the end of May 2016, CCM took part in the 23rd China Phosphate Fertilizer Annual Meeting held in Beijing. At the meeting, the industry's gains and losses during 2011-2015 as well as opportunities and challenges in the near future have garnered great attention from experts and phosphate fertilizer enterprises.
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