Zhitong Finance and Economics learned that China Securities Construction Investment released a research report saying that according to CRU, China's phosphate fertilizer export quota in 2024 will be about 7 million tons, which will be implemented in mid-March; In terms of volume, China's 24-year Q1 phosphate fertilizer exports are significantly limited, down more than 50% year-on-year, so the phosphate fertilizer export quota is expected to increase the export volume and overall demand, it is expected that from the end of March, phosphate fertilizer exports are expected to resonate with spring ploughing demand; Judging from the inventory data, the inventory of monoammonium phosphate and diammonium phosphate industries in China is at a three-year low, which forms a strong support for the first placeAt present, ammonium has begun to rise, and we are optimistic about the follow-up phosphate fertilizer
Events:
Recently, according to CRU, China's phosphate fertilizer export quota in 2024 is about 7 million tons (from March 15, 2024 to April 30, 2025), of which monoammonium phosphate is about 2 million tons and diammonium phosphate is about 5 million tons.
The main views of CSC are as follows:
Export quotas have been implemented, and exports are expected to accelerate from March
From the perspective of annual volume, according to customs data, China's annual export volume of monoammonium phosphate in 2023 will be 2.04 million tons, and the export volume of diammonium phosphate will be 5.04 million tons, which will be basically the same as the export quota in 2024; From the point of view of Q1 volume, due to the restriction of phosphate fertilizer exports in November 23, China's overall phosphate fertilizer exports declined more in Q1 24; According to 23 years of customs data, China exported 530,000 tons of monoammonium phosphate and 630,000 tons of diammonium phosphate in Q1 of 23; According to CRU estimates, China will export 150,000 tons of monoammonium phosphate in Q1 of 24 (down 72% year-on-year) and 300,000 tons of diammonium phosphate (down 53% year-on-year);
From the point of view of time, the export quota of this round of phosphate fertilizer starts from March 15, and the inspection cycle is 1-2 weeks, and the export volume is expected to start to climb at the end of March. In addition, data over the years show that China's phosphate fertilizer exports have increased since March and April each year, so this round of export policies is expected to meet the needs of international orders such as India, and follow-up attention to the landing of fertilizer subsidies in India.
Phosphate fertilizer stocks are at a 3-year low, and it is expected to be
According to Baichuan Yingfu, as of March 1, China's monoammonium phosphate industry inventory was 1470,000 tons, diammonium phosphate industry inventory 1470,000 tons, all of which are at the low level of the past three years, forming a strong support for the first place.
On the demand side, in addition to the above-mentioned export stimulus, as the weather warms, spring ploughing demand is expected to continue to be released, resonating with exports. As of March 1, the market for monoammonium phosphate with 55% content was 3,050 yuan tons, which was 61 yuan tons lower than the low point in February; 64% content diammonium phosphate market **3668 yuan ton, due to the early resistance, the current ** has not changed. It is expected that under the stimulation of subsequent supply and demand, phosphate fertilizer** may have a better performance.
The supply of phosphate rock is limited, and it is expected to be strong in the medium to long term
From the perspective of long-term supply and demand of phosphate rock, considering the restorative growth of phosphate fertilizer and the continuous expansion of downstream wet phosphoric acid and iron phosphate, it is expected that China's phosphate rock demand will increase by 2.84 million tons in 24 years, and with the limitation of supply and the decline in grade year by year, it is expected that the effective supply will increase by 900,000 tons in 24 years.
*According to Baichuan Yingfu, as of March 1, China's 30% grade phosphate rock **1007 yuan ton; and phosphate rock CFR India (68-70% BPL) **15633 yuan ton, converted into 30% grade of about 1485 yuan ton, significantly higher than the domestic **; Under the tight balance between supply and demand of phosphate rock, we are optimistic about the revaluation of phosphate rock value.
Risk Warning
Fluctuations in raw materials: Upstream raw materials of phosphorus chemical products such as phosphate fertilizers include sulfur, synthetic ammonia, coal and other bulk products.
Export policy fluctuations: If the short-term phosphate fertilizer is too fast, it may trigger the regulation and control of the national phosphate fertilizer export policy, which will adversely affect the fundamentals of the phosphate fertilizer-phosphorus chemical industry chain;
Downstream demand is less than expected: the company's downstream is greatly affected by international, domestic and foreign agrochemical products, and international agrochemicals are affected by multiple factors such as the global food cycle, geopolitics and agriculture, and there is a certain degree of uncertainty. If the international food price is rapid, it may have a certain impact on the phosphate fertilizer, and even cause disturbance to the phosphorus chemical series products by affecting the phosphate rock; Similarly, if the domestic demand for spring ploughing is less than expected, it may have an impact on the prosperity of phosphorus chemical industry.