China's Chemical Industry Minerals Imbalance

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Drying equipment

China Drying Newsletter is a basic raw material for producing chemical fertilizers and related chemical products. Chemical minerals have a very important position in the national economy, especially phosphate rock, pyrite, and potassium salt resources, and are used as basic raw materials for the production of phosphate fertilizers and potash fertilizers. Promote food production, ensure food security, and promote social harmony.

However, China's phosphate mineral resources are rich and not rich, and the contradiction between the shortage of potassium salt resources and sulfur resources is quite prominent. Du Jiahai, deputy secretary-general of China National Association of Chemical Industry and Mining Industry, said that the major problems currently faced are: insufficient investment in exploration of important chemical and mineral enterprises, excessive consumption of resource reserves, reduction of retained reserves, and imbalance of storage and production ratios.

Since the reform and opening up, especially in the past 10 years, China’s chemical mining industry has developed rapidly, and the output of chemical and mineral products has grown rapidly, basically satisfying domestic demand. However, the replacement of important chemical mineral resources and reserve capacity are insufficient, and new reserves cannot keep up with the amount of exploitation. Some people worry about it.

Du Jiahai called for the state to strengthen policy guidance and encourage enterprises to develop and utilize low-grade ore of phosphorus, sulfur, and potassium resources, and to convert low-grade phosphate ore, pyrite, and solid-liquid conversion of low-grade potash mines Yes, the state should give more preferential policies on price disposal and taxation.

Identify overall growth in reserves

According to the data provided by the China Association of Chemical Mining and Minerals, by the end of 2011, 12 of China's 27 types of chemical mineral resources had increased their reserves, while 11 had decreased and 4 remained unchanged. The reserves of phosphorus, sulfur, potassium, boron, barite, fluorite, and other six major chemical mineral resources increased by 3 and 3 decreased.

Taking phosphorus, sulfur, and potassium as examples of three important chemical minerals. As of the end of 2011, the phosphate reserves identified 19.36 billion tons of natural resources, a net increase of 730 million tons from 2010, an increase of 3.9%, of which 1.34 billion tons of new exploration, recalculated to reduce 500 million tons. The newly added reserves are mainly the exploration of the Dongshenshan area of ​​the Yangshui mining area in Kaiyang, Guizhou (580 million tons), the Luohu phosphorus deposit in Yuhua Township of Pan’an County, Guizhou (380 million tons), and the Wawu Phosphorus Mine at Xingshen Phosphorus Mine in Xingshan County, Hubei Province. District (110 million tons), Hubei Yichang Phosphate Ore Huaping Section (100 million tons). As of the end of 2011, pyrite identified a total of 5.68 billion tons of resource reserves, a decrease of 0.1 billion tons from 2010, a decrease of 0.2%. As of the end of 2011, potash identified resource reserves of 1.07 billion tons, a net increase of 140 million tons from 2010, an increase of 15%, and its increase was mainly caused by an increase in recalculations. The increase in potash deposits was mainly due to a 100 million tons recalculation at the Beletan mining area of ​​the Qarqahan K magnesium salt mine in Qinghai, and a recalculation of 0.4 million tons at the Qarhan coal mine in the Qarhan salt lake in Qinghai.

“Our country’s important chemical mineral resources still maintain the previous pattern. Phosphate resources can meet domestic demand, and there is a relative lack of potassium salt and sulfur. However, judging from the output value and output of chemical minerals, China still achieved steady and rapid growth.” Du Jiahai At the beginning of 2012, China had a total of 1992 chemical mining companies, of which 166 were large-scale, 189 medium-sized, 1,102 small, and 535 small mines.

According to statistics from the National Bureau of Statistics, from January to November 2012, 287 enterprises above designated size in the mining industry of chemical minerals realized a current gross industrial output value of 47.3 billion yuan, an increase of 36.1% year-on-year, an increase of 17.6 percentage points; the scale of the potash fertilizer manufacturing industry was 58; The above-mentioned enterprises achieved a total current industrial output value of 24.88 billion yuan, a year-on-year increase of 15.8%, a decrease of 18.2 percentage points.

“In 2012, the output value of the chemical mining and potash fertilizer manufacturing industry grew steadily and rapidly, but the growth rate slowed down significantly.” Du Jiahai said that after the output of phosphate rock in China exceeded the 30 million tons mark in 2005, it has been growing rapidly. Accelerated growth after 2008, with a net increase in annual output of around 10 million tons. In 2011, the growth rate reached a record high of 33.2%.

The above situation has changed significantly in 2012. However, according to Du Jiahai, the slower growth rate in 2012 is conducive to the structural adjustment of the phosphate ore industry and changes in the way of development. He believes that the rapid growth of phosphate rock production in previous years has benefited from the rapid development of China's phosphate and compound fertilizer industry.

According to the National Bureau of Statistics Express, between January and November 2012, the total production of phosphate fertilizers for the downstream phosphate phosphors and pyrite mines of important chemical minerals was 18.31 million tons, a year-on-year increase of 16.7%; sulfuric acid production was 69.576 million tons, a year-on-year increase of 4.8. %, the increase in output of phosphate rock basically matches the increase in output of phosphate fertilizer.

The overall pattern of supply and demand has not changed

"Compared with the situation of China's important chemical mineral resources, the supply and demand of China's important chemical mineral products still maintain the previous pattern." Du Jiahai said that the phosphate rock can meet domestic demand, there is a small amount of exports; potassium salt, sulfur resources are relatively short, need to import a lot to meet Domestic demand.

According to the National Bureau of Statistics Express, from January to November 2012, China exported 410,000 tons of phosphate ore, which was less than 0.5% of production, a decrease of 32.7% year-on-year. In recent years, China adopted quotas and high tariff policies on export of phosphate ore to restrict exports, resulting in a significant decline in the export of phosphate ore year after year. From January to November, China imported 6.345 million tons of potash fertilizer, which was a year-on-year decline of 0.1%; among them, 6.113 million tons of potassium chloride was down by 0.6% year-on-year. China's import of sulphur resources is dominated by sulphur. From January to November, imported sulphur was 10.354 million tons, a year-on-year increase of 18.3%.

Du Jiahai said that with the increase of potassium fertilizer production in China and the increase in the recovery of sulfur from natural gas and petroleum, the external dependence of potassium fertilizer and sulfur resources has been reduced to varying degrees.

According to the statistics, in 2012, the supply and demand of domestic chemical mineral products were basically balanced. From January to November, the mining output of the chemical mining industry achieved a current sales value of 44.13 billion yuan, a year-on-year increase of 28.3%; the product sales rate was 93.3%, a year-on-year decrease of 5.63 percentage points. , Inventory has increased. The potash fertilizer manufacturing industry achieved a current sales value of 21.45 billion yuan, a year-on-year increase of 22.8%; the product sales rate was 86%, an increase of 4.89 percentage points year-on-year.

In the supply price of chemical and mineral products market, Du Jiahai said that in 2012, the prices of important chemical and mineral products were basically stable. According to statistics, in the first 11 months of 2012, the cumulative price index of the mining and mining industry was 107.7, a year-on-year increase of 7.7 percentage points. In the downstream industries, the price index of potash fertilizer manufacturing was 95.2 in the same period of last year, a decrease of 4.8 percentage points. Phosphate ore prices showed highs and lows. In the first half of the year, the 2011 rally continued to rise, rising from RMB 500/tonne to RMB 640/tonne in June, and falling back to RMB 520/tonne in December from July. .

In addition, the price of pyrite is basically maintained at around RMB 400/t throughout the year. Domestic potassium chloride prices rose slightly from 3,100 yuan/ton in January to 3,150 yuan/ton in May, gradually falling back to 2,900 yuan/ton in November; potassium sulfate has been declining for the whole year, from 3,780 yuan/ton in January. It fell back to 3,400 yuan/ton in December.

Du Jiahai said that in 2012, the main business revenues, total profits and taxes, and total profits of the mining and mining industries and downstream manufacturing industries increased at the same time, and the company’s profits continued to improve. The data show that from January to November 2012, the total investment in China's chemical mining and mining industry was 12.78 billion yuan, an increase of 21.1% year-on-year; the total investment in the potash fertilizer manufacturing industry was 4.98 billion yuan, an increase of 24.1% year-on-year, and investment in fixed assets continued to be active.

Support agriculture and minerals should give policy support

In recent years, with respect to the conservation and comprehensive utilization of mineral resources, China's chemical mining enterprises have intensified technological innovation and achieved fruitful results. Du Jiahai said that with the continuous enhancement of independent innovation capabilities, the level of China's resource utilization is also continuously improving. This has played a significant role in stabilizing the market supply pattern, but the state should support policies concerning mineral products involving agricultural resources. . He predicted that in 2013, the important chemical and mineral products market will continue to maintain a stable pattern.

In terms of phosphate rock, low-grade ore grades have been gradually used, production capacity has increased rapidly, and production has increased steadily, but the rate of increase has declined. Contradictions between supply and demand have shifted from basic balances to potential excesses. Stable mining, increased ore dressing, increased production, and production costs Increased prices remained stable.

In the case of pyrite, due to the impact of imported sulphur, the output of pyrite slightly recovered in recent years. In 2012, the output was the same as that of the previous year. The output of pyrite in 2013 is expected to remain unchanged from that in 2012. The price of pyrite is affected by the price of sulphur. The price of domestic sulphur has been falling slightly in 2012, and the decline has started to increase in September. It is expected that the price of pyrite will fall this year.

In the case of potash fertilizer, the increase in output was modest and continued to depend on imports. The price was synchronized with the international market. On December 31, 2012, Canadian potash joint sales company Canpotex and Sinochem Fertilizers reached a new annual potash supply contract with a contract price of 1 million tons of potassium chloride. The delivery period is from January to June 2013. It is expected that this year. Potash prices are basically stable.

For downstream consumption, a stable supply market and a stable price are certainly a good thing. However, Mr Du Jiahai’s concern is that due to the unreasonable collection of resource taxes, it may impose a significant burden on production companies.

Taking phosphate rock as an example, phosphate rock is the main raw material for the production of phosphate and compound fertilizer, and is an important agricultural and mineral product. Currently, the resource tax rate of RMB 15/ton is already high. It is understood that from January 1 this year, the Ministry of Finance in Hubei implemented the trial reform of the phosphorus ore resources tax will change the taxation of phosphate resources from specific collection to ad valorem so that the phosphate tax rate will be as high as 10%.

Du Jiahai said that this is the highest resource tax rate for all mineral products and will boost the price of phosphate rock, which is obviously inconsistent with the country’s agriculture support policy. At the same time, the resource tax collection does not distinguish between ores and beneficiation concentrates. It does not play a role in encouraging the use of low-grade phosphate rock, which is not conducive to the intensive use of resources.

It is for these reasons that Du Jiahai believes that the phosphate tax rate should be reduced. He suggested that as soon as possible to solve the problem of high and unreasonable phosphorus resources tax, while distinguishing the original ore and mineral processing product tax rate, mineral processing product tax rate should be lower than the original ore products, thereby promoting the use of low-grade phosphate rock, improve the phosphate rock resource security capabilities.

Du Jiahai said that the country should continue to conduct differentiated management according to the characteristics of different mineral resources and the status of development and utilization. In addition, there is a shortage of sulphur resources in China, and pyrite is still one of the major sulfur sources in China. However, China's pulverized ore mining enterprises have lower benefits, and the state should provide support in terms of policies.

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