Yellow Phosphorus: Annual Analysis in 2023 and Market outlook in 2024!

 Industry overview of Yellow phosphorus

 Yellow phosphorus is also called white phosphorus. White or light yellow and semi-transparent solid. Yellow phosphorus is located in the middle reaches of the whole phosphorus chemical industry chain, and the downstream demand distribution of yellow phosphorus is mainly concentrated in the two major fields of phosphoric acid (43%) and phosphorus trichloride (37%), and it is also widely used in specific applications. The main uses of yellow phosphorus in other aspects are the production of Sodium hypophosphite, Phosphorus pentasulfide, Red phosphorus, Hexametaphosphate, Phosphorus pentoxid, etc., and its consumption accounts for about 15% of the total consumption of yellow phosphorus.

Market analysis 

According to commodity data monitoring, the yellow phosphorus’ market in 2023 is mainly divided into three stages of decline - rise - fall, and the price fell as a whole. At the beginning of the year (January 1), the average price of yellow phosphorus was 33,125 yuan/ton, and at the end of the year (December 31), the average price was 22,962.67 yuan/ton, and the price fell during the year, the range was 30.68%. The highest point of the year was $33,250 on January 4 and the lowest was $20,000 on May 11.

The first phase——the decline phase from January to mid-May. The second stage——the rising stage from mid-May to mid-November. The third stage,——the decline phase from mid-November to the end of December. 

The price of yellow phosphorus fell mainly from January to March in the first quarter. The market is lighter around the Lunar New Year holiday in January. In late February, the news of power rationing in Yunnan came out, and the overall market trading situation improved. In March, the supply of yellow phosphorus market increased significantly, the high-end price was difficult to deal with, and the market price was lowered. The average daily price on January 1 was 33,125 yuan/ton, and the average daily price on March 31 was 30,300 yuan/ton, with a cumulative decline of 8.53% from January to March.

In the second quarter, from April to June, the price of yellow phosphorus fell first and then rose, and the overall decline was mainly. In April, the domestic yellow phosphorus market continued to weaken, the new single transaction was limited, and the yellow phosphorus market price fell sharply. In May, the market price of yellow phosphorus fell first and then rose. In June, the yellow phosphorus market price rose first and then fell, there was not much inventory on the floor, low prices were reluctant to sell, and the overall market price rose. The average daily price on April 1 was 30,300 yuan/ton, and the average daily price on June 30 was 22,900 yuan/ton, with a cumulative decline of 24.42% from April to June.

In the third quarter, from July to September, the price of yellow phosphorus rose first and then fell, and the overall increase was mainly. 7-8 market start is still at a low level, low-cost goods are difficult to find in the market, the new single negotiation atmosphere is strong, and the price is rising. In late September, the downstream procurement was also basically completed, the dealers in the field took goods at low prices, and the focus of the new single transaction price gradually went down. The average daily price on July 1 was 22900 yuan/ton, and the average daily price on September 30 was 25522.67 yuan/ton, with a cumulative increase of 11.45% from July to September.

In the fourth quarter, from October to December, the price of yellow phosphorus rose first and then fell, and the overall decline was mainly. In October, the price of upstream phosphate ore rose, and there were more inquiries downstream, and it was more difficult to purchase at lower prices. In November, affected by the power rationing policy in Yunnan, enterprises have a strong willingness to sell, and the price is raised. In December, the market trading situation is light, the demand is poor, the downstream price procurement, the market focus is downward. The average daily price on November 1 was 25,522.67 yuan/ton, and the average daily price on December 31 was 22,972.67 / ton, with a cumulative decline of 10.03% from October to December.

Production capacity of Yellow phosphorus  

The production capacity of yellow phosphorus in China is distributed in the provinces with relatively concentrated phosphate resources and hydropower resources, mainly in Hubei, Sichuan, Guizhou and Yunnan provinces. In 2022, the total production capacity of yellow phosphorus will reach 1.448,500 tons, an increase of 2.73%. According to incomplete statistics of relevant agencies, the current domestic yellow phosphorus production capacity has increased slightly, and by the end of December 2023, the yellow phosphorus production capacity has increased to 1.459 million tons/year. Not much different from 2022. In terms of output, May 2023 is the lowest, with a monthly output of about 35,000 tons. The highest monthly output was about 74,500 tons in October. The comprehensive output is expected to be about 660,000 tons in 2023.

Import and export volume of Yellow phosphorus

According to customs statistics, the cumulative export volume of yellow phosphorus from January to November 2023 is 57,600 kg, and the export amount is 385,920 US dollars. From January to December 2023, China imported 0 tons of yellow phosphorus. Considering the cost of tariffs and transportation, large-scale import and export of yellow phosphorus is still not feasible. It is expected that in recent years, China's yellow phosphorus is still mainly produced and sold by itself, and the import and export volume are not large.

Upstream material: According to data monitoring shows that as of December 31, 2023, the average reference price of 30% grade phosphate ore in China is near 1034 yuan/ton, compared with January 1, 2023 (phosphate ore reference price 1056 yuan/ton), the price is down 22 yuan/ton, a decline of 2.08%. In 2023, the domestic phosphate ore market as a whole showed a slight decline in the mixed operation.

In 2022, China's phosphate ore production reached 104.745 million tons, an increase of 1.8%. From January to November 2023, the overall output of phosphate rock was 94,005,000 tons, and the cumulative output of major phosphate rock producing areas throughout the year was reduced by 3 million tons compared with 2022.

Upstream fuel: According to market analysis: On January 1, 2023, the ex-factory price of first-grade metallurgical coke was 2682 yuan/ton, and the ex-factory price of first-grade metallurgical coke was 2430 yuan/ton on December 31, and the price fell during the year, down 9.4%. In 2023, the coke market rose first and then fell, and the overall decline trend.

Bureau of Statistics data from January to November 2023, the national coke production of 450 million tons, an increase of 3.27%. The overall production of coke has maintained a slight increase, and the production of coke is expected to be 490 million tons in 2023.

Domestic demand : In terms of phosphorus trichloride, China is one of the world's largest producers and consumers of phosphorus trichloride. It is expected that in 2023, China's phosphorus trichloride production is expected to increase to 1,975,900 tons, and the demand is expected to increase to 1,965,300 tons.

According to market analysis: On January 1, 2023, the average price of phosphoric acid was 9025 yuan/ton, and the average daily price on December 31 was 6340 yuan/ton, and the price fell during the year, with a range of 29.75%. In 2023, phosphoric acid as a whole showed a downward trend.

Forecast  of future market 

At the macro level, eight departments, including the Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Natural Resources, the Ministry of Ecology and Environment, the Ministry of Agriculture and Rural Affairs, the Ministry of Emergency Management, and the Chinese Academy of Sciences, recently jointly issued the Implementation Plan for Promoting the Efficient and High Value Utilization of Phosphorus Resources. The "plan" proposes that by 2026, China's sustainable protection ability of phosphorus resources will be significantly enhanced, the independent innovation ability of phosphorus chemical industry and the green safety level will be steadily improved, the supply capacity of high-end phosphorus chemicals will be greatly improved, the regional advantages will be complementary and the linkage development ability will be continuously enhanced, and the resilience and security level of the industrial chain and supply chain will be more stable. Specific development goals have been defined from four aspects: innovation-driven, structural optimization, green development, and ecological cultivation.

Upstream: The slight decline in the price of phosphate ore supports the cost of yellow phosphorus in general. The price of coke market has fallen, and the support for yellow phosphorus is limited. Overall, the cost side support is not strong. 

The supply : The small growth of domestic yellow phosphorus production capacity is little different from that in 2022. At present, there are new project plans in Yunnan, Sichuan and Guizhou regions, but the actual implementation needs to be seen according to the current situation. In the case of the contradiction between supply and demand in the yellow phosphorus market in 2024, the actual new production capacity will be delayed.

Import and export: According to customs statistics, the cumulative export volume of yellow phosphorus from January to November 2023 is 57,600 kg. From January to November, 0 tons of yellow phosphorus was imported. Considering the cost of tariffs and transportation, large-scale import and export of yellow phosphorus is still not feasible. It is expected that in recent years, China's yellow phosphorus is still mainly produced and sold by itself, and the import and export volume are not large.

Demand: With the continuous development of the economy, phosphate fertilizer, lithium battery and other downstream industry scale continues to expand, in recent years, China's yellow phosphorus market demand continues to grow, the industry has a broad consumer market. The prospect of downstream phosphorus trichloride is promising, which has played a certain supporting role in the demand for yellow phosphorus. 

In summary

In the year of the contradiction between supply and demand in the yellow phosphorus market in 2023, the overall market price fell. In 2024, opportunities and challenges coexist in the yellow phosphorus market. Overall, the future will maintain stable development. Domestic yellow phosphorus production enterprises need to increase investment in environmental protection, improve production processes, reduce source consumption and pollution emissions, and promote the development of the industry in a green and sustainable direction.