China’s phosphorus fertilizer manufacturing witnesses a tough scene in 2012.

1. China loosens export of phosphate fertilizer
Summary: China’s phosphorus fertilizer manufacturing witnesses a tough scene in 2012.
Tags: Phosphorus ore, yellow phosphorus, phosphate fertilizer, fine phosphate chemicals
On Dec.17th, 2012, China’s Customs Tariff Commission of the State Council (CTCSC)
promulgated the export tariff of 2013. In accordance with the new export tariff, China is to loosen
the export policy on phosphate fertilizer (including ammonium phosphate (DAP & MAP) and
triple superphosphate). The new export tariff will take effect on Jan.1st, 2013, according to CCM’s
latest report, Phosphorus Industry China Monthly Report 1301 issued on Jan.15, 2013.
Compared with the corresponding export tariff in 2012, the new export policy of DAP and MAP
highlighted the following points:
—lowering the export tariff, especially during peak season;
—prolonging the export period for low export tariff from four months to five months;
—raising the export trigger price.
The loosened export policy on phosphate fertilizer mainly resulted from an air of depression
spreading across China’s phosphate fertilizer market in 2012.
In H1 2012, most listed phosphate fertilizer companies saw a decline in profit margin of DAP and
MAP. For instance, Anhui Liuguo Chemical Industry Stock Co., Ltd. (Liuguo Chemical)’s profit
margin in DAP dropped from 14.52% in H1 2011 to 5.25% in H1 2012. Like Liuguo Chemical,
Hubei Yihua Chemical Industry Co., LTD. (Hubei Yihua) also saw a 37.12% year-on-year decline
in profit margin of DAP in H1 2012.
In H2 2012, China’s poor export performance in phosphate fertilizer casted another shadow over
domestic phosphate fertilizer firms.
In general, both in short run and long run, the loosened export policy is bound to benefit China’s
phosphate fertilizer market.
In the short term, China’s export tariff adjustment for phosphate fertilizer shored up the confidence
of phosphate fertilizer firms and reversed the falling price for phosphate fertilizer. According to
the data from China National Agricultural Means of Production Circulation Association, China’s
wholesale price index for DAP (CPPI) immediately bounced off the lows in one week after the
release of the new export policy on Dec.17th.
In the long term, China’s phosphate fertilizer firms would be motivated to export DAP and MAP
in the high-tariff period of 2013 due to the reduction in cost of export. Nonetheless, the real export
situation of phosphate fertilizer still depends on international market.
Table contents of Phosphorus Industry China Monthly Report 1301:

2. Headlines of Phosphorus Industry China Monthly Report 1301
Annual Review of Phosphate Industry in 2012
Top five phosphorus industry events in 2012
Comparison between China’s prime phosphorus enterprises
Company Dynamics
Kailin Group completes construction of MDCP project
Hubei Xingfa to continue phosphate projects despite Dequest quits
Yichang City reminds local phosphorus industry to orderly develop
China’s phosphoric acid industry expected to see reshuffle
China loosens export of phosphate fertilizer
Anti-dumping keeps plaguing types of China’s phosphate salts
Africa’s phosphate fertilizer industry show alluring prospect
International trade of phosphate chemicals in Nov. 2012
Price monitoring of some phosphate chemicals in 2012
Phosphorus Industry China Monthly Report, issued by CCM on 15th, keeps providing the
latest company dynamics related to China’s phosphorus industry, and market analysis on
supply and demand, import and export as well as global insight.
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