Summary: Upstream and downstream industries of yellow
phosphorus faced transportation difficulties under the impact of 2019-nCoV and
few transactions were seen. Yellow phosphorus manufacturers are expected to
maintain low operating rates in the short term.
In early Feb.
after the Spring Festival (late Jan. 2020), operating rates of domestic yellow
phosphorus enterprises just reached 20%. Yellow phosphorus manufacturers in
Hubei Province had still been suspending production. Only a few upstream and
downstream enterprises of yellow phosphorus resumed production due to the
latest 2019 novel coronavirus (2019-nCoV). Few transactions were made in the
yellow phosphorus market because manufacturers could not ship yellow phosphorus
out and raw materials could not be brought in as tough traffic restrictions had
been imposed in different regions.
Quotations of yellow phosphorus enterprises
scarcely changed compared with that before the Chinese New Year, but such
quotations were of little reference significance. Apart from affecting the
follow-up production, the depressed market also increased cash flow pressures
on yellow phosphorus enterprises in the short run. Given that the next few days
will become the critical period of 2019-nCoV development, yellow phosphorus
producers will face greater pressures before 13 Feb., 2020 as they could not
completely suspend production or resume large-scale production. Thus, they
tended to maintain low operating rates and seek for deals within provinces
while interprovincial transportation can be more difficult due to traffic
restriction by different provinces. Under current circumstances, enterprises
will face difficulties transporting yellow phosphorus before 13 Feb., 2020.
Most downstream
customers of yellow phosphorus said that they would resume production after the
Lantern Festival (8 Feb., 2020). They are likely to raise prices of their
products under tight supplies of yellow phosphorus in the short run as they
kept low inventories before the Spring Festival. Nevertheless, yellow
phosphorus supplies will edge up as yellow phosphorus manufacturers gradually
resume production.
The market of
phosphorus ore remained stable and manufacturers scarcely changed their
quotations. Prices of 30% phosphorus ore fluctuated between USD47.65/t
(RMB330/t) and USD59.21/t (RMB410/t).
More updates in CCM China Phosphorus industry monthly E-News. Email emarket1@cnchemicals.com to know more information.