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Chinese government initiated regulation of organophosphorus industry, price rise of yellow phosphorus affecting price of glyphosate
Jul. 26, 2019
From the evening of 3rd July, China’s largest news media reported pollution caused by yellow phosphorus. After the report, some yellow phosphorus producers were shut down for modifications, followed by continued decreases in production loads. Under these circumstances, 21 producers have shut down furnaces. These furnaces had a production capacity of 578,000 tons, which accounts for 45.2% of the capacity of the entire industry. The production ratio at the moment is 37.11%, of which Yunnan is at 32.98% and Sichuan at 74.3%. Subsequently, on the 9th July, the price of yellow phosphorus rose significantly, by Yuan2,000 over the price of Yuan14,300-15,500 per ton, which is an increase of over 15%. At present, Yuntianhua, Chengxing Phosph-Chemical and Xingfa Group possesses 165,000, 150,000 and 121,000 tons of capacity, respectively.
Glyphosate vendors are refraining from quoting prices, as they prepare for price rises. Yellow phosphorus is an important raw material for organophosphorus pesticides, such as glyphosate, glufosinate, DDVP, dipterex and chlorpyrifos. Since the 3rd July, yellow phosphorus has not been quoted, and a price rise has been implemented today. In this period, organophosphorus pesticide manufacturers have also made preparations for price rises. The price rise in raw materials will surely be passed on to glyphosate, the price of which is expected to rise even higher. At present, Xingfa Group, Wynca and Jiangshan Agrochemical and Chemicals respectively possesses 180,000, 80,000 and 70,000 tons of capacity. Glyphosate manufacturers will benefit directly, if the price rises.
MAP price has also started to rise. MAP is not directly related to yellow phosphorus, but its price may continue to rise due to the stricter control over discharges of total phosphorus, and the affected phosphorus industry. In the long run, a reduced supply of MAP is foreseen in the coming 1-2 years. At present, Xinyangfeng Fertilizer, Yuntianhua, Sierte Fertilizer and Xingfa Group possesses 1.8 million, 1.05 million, 900,000 and 240,000 tons of capacity, respectively.
Source: AgroNews
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