Ammonium phosphate enterprises gradually increase the degree of integration of mineral fertilizers

The business club reported on April 1 that the big bull market of phosphate rock has caused a big change in the market structure of ammonium phosphate. Some large ammonium phosphate companies launched a large-scale “phosphorus movement” from last year, and the current integration of mineral fertilizers The degree has gradually increased and is still moving forward.

The data shows that China's phosphate rock reserves ranks second in the world, but the average grade is only 17%. At present, China has only 2.111 billion tons of reserves of retained phosphate rock resources, of which only about half of the rich minerals with a grade of more than 30% will be mined at about 20 years. In response to such a situation, the Ministry of Industry and Information Technology officially released the "Access conditions for the ammonium phosphate industry" on September 19, 2011. The main contents include: (1) In the next three years, in principle, no new or expanded wet-process phosphoric acid and associated monoammonium phosphate or diammonium phosphate units will be built; (2) Relocation companies will re-create wet-process phosphoric acid and supporting monoammonium phosphate In the case of diammonium phosphate plants, there must be phosphorous and *resource protection; (3) The existing ammonium phosphate enterprises must be equipped with standardized phosphogypsum storage yards. Enterprises that have not built phosphogypsum storage yards must complete plant construction within three years, and Phosphogypsum utilization must reach 15% of annual production within three years. Enterprises that fail to meet the above requirements must be shut down.

Under this background, the concept of mineral fertilizer integration was born. The integration of mineral fertilizers can effectively reduce the cost pressure from the price increase of ore to the company. The integration of mineral fertilizers internalizes external costs and turns them into profits; companies can reduce certain tax expenditures through internal operations; downstream products can be formulated with the market price of phosphate ore to ensure stable prices of finished products. Through the above three channels, the profitability of ammonium phosphate enterprises will increase, and will have greater development vitality and prospects.

At present, some large-scale ammonium phosphate companies with good corporate efficiency are vigorously integrating resources, and the concentration of phosphate ore resources is gradually increasing. Three major concentrated areas for mineral fertilizers are successively formed in the country: Yunnan, Guizhou and Hubei. In the provinces with large phosphorus resources, there have been feasible cases for the production enterprises to acquire or directly participate in the mining of phosphate rock ore, and it will gradually become possible to realize real mineral fertilizer integration through the combination of strong and strong alliances, mergers and reorganizations.