On October 18, 2019, Sichuan Chuanlin Industry
Co., Ltd (Sichuan Chuanlin) and Huize County reached an agreement for a
phosphorus chemical project of USD 46.66 million (RMB 330 million) with Yunnan
Phosphorus Chemical Co., Ltd (Yunnan Phosphorus Chemical), which will promote
the development of Yunnan Phosphorus Chemical and economic growth in the Yunnan
province. The project is divided into two phases. RMB 250 million will be spent
mainly on the technological transformation and relocation of electric furnaces
which can produce of 50,000 tons of yellow phosphorus annually, and other
devices which annually produce 100,000 tons of wet-process phosphoric acid,
500,000 tons of phosphoric slag powder, 120,000 tons of lime from exhaust as
well as 200,000 tons of phosphates in the first phase of the project.
In the second phase of the project, Sichuan
Chuanlin and Huize County will invest RMB 80 million mainly in the
technological transformation and relocation of devices for phosphatic
fertilizer production and compound phosphate fertilizer production.
The first phase is estimated to be completed
within 18 months, and the second phase will start once the first phase is
finished. The project will make a strong new phosphorus chemical industry in
Huize County and will also speed up the restructuring and transformation of the
phosphorus chemical industry.
Increased supply of Chinese phosphorus
lowers prices, hurts profits
China is the largest producer and exporting
country of yellow phosphorous in the world. However, the phosphorus chemical
products that China exports are mostly primary commodities, such as yellow
phosphorus, phosphoric acid, sodium tripolyphosphate (STTP), animal fodder as
well as calcium monophosphate and sodium hypophosphite for toothpaste. The
profit margin of these products is low, and therefore, manufacturers do not
earn significant profits from the products. In particular, the export products
of yellow phosphorus have recently experienced an increase in supply and prices
have decreased.
China does not have a large variety of
different types of phosphorus chemical product, and high-quality phosphate chemicals
must be imported from other countries. Generally speaking, the product
structure of the phosphorus chemical industry is not balanced, consisting of
large percentage of low valued inorganic phosphorus chemical products and small
percentage of high valued organic phosphorus products. The phosphorus chemical
companies should learn how to make profits in the market, and the companies
should consider it as both an opportunity and a challenge; otherwise they will
be eliminated.
Phosphorus production energy intensive
and pollutive
China has rich phosphate rock resources. It
ranks the second in the world when it comes to the total number of phosphate
rock resources that have been found, while Morocco ranks first globally.
Phosphate rock resources were mainly found
in five provinces, namely Yunnan, Guizhou, Hubei, Hunan and Sichuan. Making
phosphorus chemical products is a process with high energy consumption. For
example, in the production of yellow phosphorus, each ton of yellow phosphorus
requires more than 14,500 kilowatt-hours of electricity on average. The cost of
the electricity accounts for over 70% of the total manufacturing cost of yellow
phosphorus. Also, the technology of producing phosphorus in China is not
developed and highly energy consuming.
For example, the electricity consumption of
yellow phosphorus production is 12,500 kwh/t in other countries while the
electricity consumption of yellow phosphorus production is 16,000 kwh/t in
China. Additionally, the phosphorus chemical industry is an industry with high
contamination. For example, substances such as slag, ferrophosphorus, gas,
phosphorous slag and wastewater are created during the production of yellow
phosphorus. If these substances cannot be used wisely, they will become refuse
which will cause environmental pollution. The increasing amount of phosphorous
slag has reached 8 million tons each year, releasing 1.2 billion Nm3 of exhaust
in the air. The emissions of SO2, fluoride and phosphorus are 12,000 tons,
1,000 tons and 120 tons respectively.
For more information on China’s phosphorus
market, please check our resources on phosphorous
chemicals.