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东莞证券:磷酸铁新增产能有望加快释放 上游磷矿石需求或将明显增长

Dongguan Securities: New iron phosphate production capacity is expected to accelerate the release of upstream phosphate demand, which may increase significantly

Zhitong Finance ·  Jan 31, 2023 11:02

According to a research report released by Dongguan Securities, China's current basic phosphate ore reserves are 3.24 billion tons, ranking second in the world, but the overall grade is not high and the ore is less rich, with more than 90 per cent of medium and low grade, according to the APP of Zhitong Finance. As the new production capacity of iron phosphate is expected to be released faster, the demand for upstream phosphate rock will increase obviously, under the background of tight supply and demand of phosphate rock, the profit of industrial chain will be transferred upstream. It is suggested to pay attention to the phosphorus chemical enterprises with high self-sufficiency rate of phosphate ore, high degree of integration and technical and cost advantages, such as 600141.SH, 600096.SH, 002895.SZ and 002312.SZ.

The main points of Dongguan Securities are as follows:

The reserves of phosphate rock in China are the second in the world, but the average grade of phosphate rock is low.

At present, the basic reserve of phosphate ore in China is 3.24 billion tons, ranking second in the world, but the overall grade is not high, rich ore is less, more than 90% are medium and low grade. In terms of downstream products, phosphate compound fertilizer is the main downstream demand area of phosphate ore, accounting for about 70%. The proportion of other products such as glyphosate and phosphate is relatively small. In recent years, due to the influence of environmental protection and other policies, the output of phosphate rock in China has shown a downward trend. In terms of new production capacity in the future, according to the announcements disclosed by some listed companies, there are more long-term new phosphate rock production capacity planned in China, but taking into account the long construction cycle of phosphate rock production capacity and the constraints of industry environmental protection policies, the short-term supply growth rate of phosphate rock may be low.

In terms of phosphate rock stock demand, phosphate fertilizer, as the largest application field downstream of phosphate rock, the demand is rigid.

The total global stocks of soybeans, corn and wheat have declined continuously in recent years, and countries have attached no less importance to food security, or formed a support for global food prices, thus maintaining farmers' enthusiasm for growing food. it is good for the global demand for chemical fertilizer to remain stable. From a domestic point of view, the current chemical fertilizer legal inspection policy restricts the export of phosphate fertilizer, the domestic supply is sufficient, and the price difference of phosphate fertilizer at home and abroad is large. The bank believes that the current inventory of monoammonium phosphate and diammonium phosphate industry is low, and the subsequent start-up of fertilizer preparation for spring ploughing is expected to boost domestic demand for chemical fertilizer and benefit the price rise of monoammonium phosphate and diammonium phosphate.

In terms of incremental demand for phosphate rock, the demand for phosphate rock of lithium iron phosphate cathode materials is expected to maintain rapid growth.

It is estimated that the total demand for phosphate rock of lithium iron phosphate cathode materials for electric vehicles and energy storage batteries in China is about 10.28 million tons in 2025, accounting for 10% of the domestic phosphate ore production in 2021. From the point of view of the planned production capacity of iron phosphate in 2023, it will play a more obvious role in pulling the demand for phosphate ore this year. Baichuan Yingfu expects to increase its iron phosphate production capacity by more than 2 million tons in 2023. Taking into account the capacity climbing and other conditions, assuming an additional 1.2 million tons of iron phosphate production in 2023, corresponding to about 4.8 million tons of phosphate rock demand, phosphate rock supply and demand may maintain a tight balance throughout the year, which is expected to support phosphate rock prices to remain high.

Risk Tips:The risk of fluctuation caused by the change in the situation in Russia and Ukraine to the prices of commodities such as energy, international grain and chemical fertilizers; the risk of recession caused by the Fed's higher-than-expected interest rate increase; the risk that the export of phosphate fertilizer is lower than expected; the risk that the growth of demand for new energy vehicles and energy storage falls short of expectations; the risk of oversupply if phosphate rock capacity is released too quickly; the risk of intensified competition in the industry; and the occurrence of force majeure events such as natural and man-made disasters.

The translation is provided by third-party software.


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