SHANGHAI, Sep 17 (SMM) — The Yunnan NDRC Energy Conservation Work Panel issued the "Notice on Striving to Fulfil Tasks on Dual Control of Energy Consumption. The local white phosphorus is a typical energy using product, with power consumption per mt as high as 15,000 kWh. Environmental protection supervision remains strict. The average monthly output of white phosphorus production line from September to December 2021 is required to not exceed 10% of the output in August.
High prices of white phosphorus are supported by production restrictions and rigid demand from downstream producers. The production capacity of white phosphorus is located in Yunnan, Guizhou, Sichuan, Hubei, accounting over 90% of the total in China.
According to SMM survey, individual plants have suspended production while others maintained low-load operation and suspended offering quotations. The capacity in Yunnan accounts over 40% of the total. Domestic production capacity will cut more than 36% amid the energy consumption control. The output will create a record low as Yunnan implements power rationing system in September. Orders for glyphosate and white phosphorus continued to be bullish with the upcoming of high season. White phosphorus was quoted with over 60,000 yuan/mt, up over 100% from early September.
Due to the irrational price hike of phosphoric acid, some iron phosphate companies began to reduce production or stopped supplying small orders from September 16, while other companies stopped offering quotations, indicating that iron phosphate prices are expected to rise to more than 20,000 yuan/mt in H2.