Yellow Phosphorus Prices to Sustain Gains after the National Day Holiday amid Broad-Based Production Curtailment in Yunnan

Published: Sep 29, 2022 15:19

Source: SMM

Save

SHANGHAI, Sep 29 (SMM) - In compliance with the Energy Efficiency Management Plan for Energy Consumption Industries from September 2022 to May 2023 formulated by relevant departments of Yunnan Province, yellow phosphorus enterprises in Yunnan shall reduce or stop their production in an all-round way from 0:00 on September 26.

The document has categorised the province's energy efficiency management into two grades: 3 million kilowatts and 4.5 million kilowatts. The enterprises involved are required to comply with the energy efficiency management indicators on the basis of the benchmark load before September 25, 2022, and shall adjust their power load according to the electricity supply and demand in Yunnan in the future. The energy efficiency management list targets 37 enterprises in yellow phosphorus, cement, lead, zinc and other industries.

Yellow phosphorus inventories are currently at a low level due to supply shock caused by the power rationing, which has fuelled bullish sentiment and left suppliers reluctant to sell. Downstream restocking after the National Day holiday will tighten the supply further and send its prices even higher.

Some market players said that Guizhou and Sichuan may also introduce similar energy consumption and production restrictions due to the approaching dry season, which will further reduce the production of yellow phosphorus.
As of September 28, the spot price of yellow phosphorus climbed to 34,900-36,900 yuan/mt, and the average price gained 400 yuan/mt in a single day to 35,900 yuan/mt. In just two trading days, the spot price of yellow phosphorus had risen by 500 yuan/mt, and soared 9,350 yuan/mt or 35.22% from August 5.

It should be noted that Yunnan issued the Notice on Firmly Commit to Energy Consumption Double Control in the same period last year. Due to high energy consumption, yellow phosphorus enterprises were required that their monthly average output from September to December 2021 shall not exceed 10% of that in August.

The sharp supply contraction, combined with the arrival of the farming season, once sent yellow phosphorus prices to a three-year high of 62,776 yuan/mt in last September.

Market Market Output

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

33 mins ago

Huazhi Energy Completed Over 100 Million Yuan Series B Financing to Accelerate Global Expansion of Energy Storage Business

According to news from "Huazhi Energy," Huazhi Energy recently completed a Series B equity financing round of over 100 million yuan, with investors including Lite-On Technology, Zhejiang Beisheng Holdings, and Zhongsheng Smart Energy. The funds will be primarily used for core energy storage technology R&D, business expansion outside China, and upgrading global delivery capabilities, injecting strong momentum into its globalization strategy.

33 mins ago

53 mins ago

China's Inaugural Million-m³ Salt Cavern Hydrogen Storage Demo Project Launched in Henan

[SMM Hydrogen Energy News Brief: China's First Million-Cubic-Meter-Level Salt Cavern Hydrogen Storage Demonstration Project Put into Operation in Henan] On April 25, China's first million-cubic-meter-level salt cavern hydrogen storage demonstration project, led by the Wuhan Institute of Rock and Soil Mechanics under the Chinese Academy of Sciences, was officially put into operation in Pingdingshan City, Henan Province. This project marked China's first hydrogen storage facility built in bedded salt rock formations, identifying the multi-scale migration patterns of hydrogen in ultra-low-permeability rock salt, overcoming the core technology of precise site and layer selection for salt cavern hydrogen storage, and effectively verifying the long-term sealing performance and engineering application feasibility of hydrogen storage in bedded salt rock.

53 mins ago

1 hour ago

300 Million Yuan! Trial Production in June! A Guizhou Anode Material Project Updates Its Progress

According to the Dalong Development Zone News and Information Center, during the Labour Day holiday, construction sites of major key projects in Dalong Development Zone, Guizhou were bustling with activity and operating at full capacity. At the project site of Guizhou Depu New Materials Technology Co., Ltd.'s 20,000 mt/year lithium-ion anode material project, nearly 60 workers remained at their posts, pushing forward with all construction tasks at full speed. "Currently, the main structures of two factory buildings have been completed. Workshop No. 3 is undergoing accelerated installation of 10 sets of roller mills, 45 sets of reactors, and other core equipment. Workshop No. 4 has completed the installation of roof panels and wall panels, and internal site leveling work is underway. The comprehensive building and the 110KV substation are also under simultaneous construction, with subsequent work to advance the improvement of fire protection facilities and hardening of the factory area roads," said Liu Shaofeng, the company's administrative supervisor. He noted that during the Labour Day holiday, workers strictly controlled project quality and safety, striving to achieve phased trial production by the end of June.

1 hour ago