The Zhitong Finance App learned that Guohai Securities released a research report saying that phosphate ore production capacity expansion is limited. It is estimated that the phosphate ore production capacity CAGR in 2023-2025 will be 5.55%, and the increase in production capacity in 2023-2024 will be relatively small. The commissioning of a large number of projects under construction in 2025 will ease the tight phosphate situation. The demand side benefits from the rapid development of new energy vehicles and strong demand for lithium iron phosphate batteries. Currently, a large number of iron phosphate projects and supporting phosphate purification projects are under construction. As these projects are put into operation one after another, demand for phosphate ore in the new energy sector is expected to continue to grow. The bank believes that the phosphate ore boom is expected to be maintained, maintaining the “recommended” rating for the phosphorus chemical industry.
It is recommended to focus on:Yuntianhua (600096.SH), Xingfa Group (600141.SH), Chuanheng Co., Ltd. (002895.SZ), Chuanfa Dragon Python (002312.SZ), Xinyangfeng (000902.SZ), Yuntu Holdings (002539.SZ), Bata Co., Ltd. (002170.SZ), Hubei Yihua (000422.SZ), etc.
The main views of Guohai Securities are as follows:
Phosphate ore: Production capacity expansion is limited, and demand continues to grow
Supply side: Phosphate ore from major companies such as Yuntianhua, Guizhou Kailin, Wengfu Group, Xingfa Group, and Chuanheng Co., Ltd. will all be mainly for personal use, exacerbating the tight flow of phosphate ore; it will take a long time to build a new phosphate ore project, and it will not be possible to contribute effective production capacity in the short term. According to the bank's forecast, the CAGR of phosphate ore production capacity in 2023-2025 will be 5.55%. The increase in production capacity in 2023-2024 will be relatively small. The commissioning of a large number of projects under construction in 2025 will ease the tight phosphate ore situation.
Demand side: The boom in high agricultural product prices continues. The country attaches great importance to stabilizing the production and supply of grain and agricultural products. Prices of superimposed phosphate fertilizer raw materials and products are stabilizing, and domestic demand for phosphate fertilizer is expected to increase steadily; at the same time, the gap between domestic and foreign phosphate fertilizer prices is expected to be reduced, and export policies are expected to be liberalized. Benefiting from the rapid development of new energy vehicles, demand for lithium iron phosphate batteries is strong; currently, a large number of iron phosphate projects and supporting phosphate purification projects are under construction. As these projects are put into operation one after another, demand for phosphate ore in the new energy sector is expected to continue to grow. According to the bank's forecast, the CAGR for phosphate ore demand in 2023-2025 will be 4.33%, and the phosphate ore operating rate will be 89%/91%/84%, respectively.
Purifying phosphoric acid: production capacity expansion accelerates, phosphogypsum limits development
Supply side: A large number of phosphorus chemical companies are expanding wet purification phosphoric acid projects. According to the bank's incomplete statistics, the current plus proposed phosphate purification project currently exceeds 5 million tons. According to the bank's forecast, the CAGR of wet purification phosphoric acid production capacity in 2023-2025 will be 28.76%.
Demand side: Benefiting from the rapid development of new energy vehicles and energy storage, lithium iron phosphate batteries are in high demand. According to the bank's forecast, the installed capacity of lithium iron phosphate batteries in China is expected to reach 1,230 GWH by 2025, and the corresponding demand for purified phosphoric acid/industrial ammonium mononium is 1,075 million tons. According to the bank's forecast, the CAGR for purified phosphoric acid demand in 2023-2025 will be 37.36%, and the operating rate of purified phosphoric acid will be 49%/39%/42%, respectively.
Most of the phosphoric acid purification projects under construction are sulfuric acid routes. According to the EIA report of the high-purity phosphoric acid production project of Pata Co., Ltd., for every ton of phosphorus chemical products produced, about 5 tons of phosphogypsum are produced. The cumulative storage volume of phosphogypsum in China has already exceeded 600 million tons, which has had a serious impact on the ecological environment. The “production by slag” mechanism for phosphogypsum in the phosphorus chemical industry is forcing enterprises to transform towards green, innovative, intensive and efficient development.
In the context of the production of phosphogypsum using slag and the expansion of ammonium phosphate production capacity, as various enterprises put into operation wet purification phosphate plants, production capacity replacement of different phosphoric acid products was realized, such as converting phosphate fertilizer into industrial grade phosphate/mononium phosphate, while the by-products of slag acid and extractive acid produced fertiliser grade phosphate. As demand for iron phosphate and fine phosphate continues to grow, the overall prosperity of phosphate chemicals and phosphate fertilizers will remain high
Risk warning:Product prices fluctuate; safe and environmentally friendly production risks; the commissioning progress of new construction projects falls short of expectations; downstream demand growth falls short of expectations; competition in the iron phosphate industry increases risks.