Operation of China’s Sulfuric Acid & Phosphate Fertilizer Sector in 2014


By Qi Yan, China Sulfuric Acid Industry Association

1. Operation of China’s sulfuric acid sector in 2014

1.1 Output of sulfuric acid

In 2014, China’s output of sulfuric acid reached 92.5 million tons, up 6.9% YoY. Of that, the output of sulfur-based sulfuric acid was 40.4 million tons, up 1.9% YoY, accounting for 43.7% of the total output; the output of smelting-based sulfuric acid was 29.4 million tons, up 19.0% YoY, accounting for 31.8% of the total; the output of pyrite-based sulfuric acid was 21.7 million tons, up 0.6% YoY, accounting for 23.5% of the total; and the output of sulfuric acid made from other raw materials was 980 kt, accounting for 1.1% of the total.
In 2014, due to the operation of new units of Guangxi Jinchuan Nonferrous Metals Co., Ltd., Fujian Zijin Mining Group Co., Ltd. and Henan Yuguang Gold and Lead Co., Ltd., the output of smelting-based sulfuric acid increased by 4.7 million tons, replacing some of the sulfur-based sulfuric acid and pyrite-based sulfuric acid. China’s top five provinces for sulfuric acid output in 2014 are listed in Table 1.
In 2014, China’s output of sulfuric acid was further concentrated toward the phosphorus producing regions, the industrial developed regions as well as the coastal regions. The output of sulfuric acid in the basic fertilizer production regions such as Yunnan, Guizhou, Hubei and Sichuan provinces accounted for 41.6% of the national total output and 66.3% of the sulfur-based sulfuric acid output. The output of sulfur-based sulfuric acid in the regions like Jiangsu province, Zhejiang province, Shanghai and Shandong province accounted for 17.5% of the total output of sulfur-based sulfuric acid. The output in the top five provinces of smelting-based sulfuric acid output accounted for 53.8% of the total output of smelting-based sulfuric acid. The output of pyrite-based sulfuric acid was concentrated in the regions surrounding pyrite mining, and the output in the top five provinces of pyrite-based sulfuric acid output accounted for 49.1% of the total output of pyrite-based sulfuric acid. China’s top five sulfuric acid producers in 2014 are shown in Table 2.
Large-scale sulfuric acid units based on smelting flue gas and sulfur-based sulfuric acid units are China’s two main kinds of sulfuric acid units. In 2014, among 347 sulfuric acid producers, there were 17 producers whose output of sulfuric acid exceeded 1.0 million tons, and the output of sulfuric acid in the top ten enterprises (including three smelting enterprises) accounted for 32.8% of the total output. Among 112 smelting-based sulfuric acid enterprises, the output of sulfuric acid in the top ten enterprises accounted for 57.9% of the total output of smelting-based sulfuric acid. Among 106 sulfur-based sulfuric acid enterprises, the output of sulfuric acid in the top ten enterprises accounted for 53.3% of the total output of sulfur-based sulfuric acid. The distribution of pyrite-based sulfuric acid enterprises is relatively scattered, and among 169 pyrite-based sulfuric acid enterprises, the output of sulfuric acid in the top ten enterprises only accounted for 21.3% of the total output of pyrite-based sulfuric acid.

1.2 Growth of sulfuric acid consumption

In 2014, China’s apparent consumption of sulfuric acid reached 93.9 million tons, up 7.2% YoY. Of that, sulfuric acid consumed by chemical fertilizers accounted for 60.9% of the total, up 4.9%; 48.7% of sulfuric acid was consumed in making high-concentration phosphate compound fertilizers, up 1.7%, and the consumption proportions of sulfuric acid in single superphosphate and other chemical fertilizers were 3.8% and 8.3%, respectively.
Sulfuric acid consumed by industry accounted for 39.1% of the total, up 7.6% YoY. Major products that require sulfuric acid in their manufacture include feed grade calcium phosphate, wet process phosphoric acid, caprolactam, titanium dioxide made by the sulfuric acid process, hydrofluoric acid, viscose fiber and citric acid. Sulfuric acid consumed in making the seven products mentioned above accounted for around 73% of the total industrial consumption of sulfuric acid. Feed grade calcium phosphate, wet process phosphoric acid, caprolactam, and titanium dioxide using sulfuric acid process were the products with rapid consumption growth, the growth being 15.7%, 54.9%, 29.5% and 19.2%, respectively, of which, wet process phosphoric acid had the most rapid consumption growth of sulfuric acid.
The production of sulfuric acid consumed in making phosphate compound fertilizers in China is mainly matched with phosphate compound fertilizer units. The output of sulfuric acid in phosphate compound fertilizer enterprises accounted for 45.5% of the total consumption and 74.4% of sulfuric acid consumed by chemical fertilizers. Of that, sulfur-based sulfuric acid and pyrite-based sulfuric acid accounted for 67% and 28.4%, respectively. The market price of smelting-based sulfuric acid in some regions is lower than the cost of self-produced sulfuric acid, and the phosphate compound fertilizer enterprises purchased over 10 million tons of smelting-based sulfuric acid, resulting in a reduction of sulfur-based sulfuric acid output.
The output of sulfuric acid matched with industrial products accounted for around 18.1% of the total consumption and 46% of sulfuric acid consumed by the industry. Of which, the sulfur-based sulfuric acid and pyrite-based sulfuric acid accounted for 62% and 35%, respectively. The volume of sulfuric acid circulating in the domestic market exceeded 40 million tons, accounting for 43% of the total consumption. Of that, smelting-based sulfuric acid accounted for 82% and dominates the domestic sulfuric acid market.

1.3 Both the supply and demand increased

In 2014, China’s consumption of sulfur resources reached 33.6 million tons, up 8.7% YoY, domestic sulfur resources rose by 11.9%, and imported sulfur resources climbed by 5.7%. China’s growth of sulfur resources mainly came from the domestic output of sulfur. China’s output of sulfur reached 5.91 million tons in 2014, a YoY growth of 12.4%, of which the output of sulfur obtained from oil refining and natural gas purification was 3.3 million tons and 2.3 million tons, respectively.
In 2014, China’s import volume of sulfur was 10.2 million tons, down 0.3% YoY. The imports mainly came from the Middle East, the former Soviet Union, East Asia and North America, etc., and the import volume of sulfur from the Middle East accounted for 42% of the total. The sulfur resources from imported nonferrous metals accounted for 35.1% and the sulfur being converted from imported sulfuric acid accounted for 2.7%. China also imported 350 kt (physical goods) of sulfur concentrates. China’s dependence on imported sulfur resources was still 50.7%.

2. Overview of China’s phosphate fertilizer sector in 2014

2.1 Output of phosphate fertilizer increased slightly in 2014

In 2014, China’s output of phosphate compound fertilizers rose slightly and reached 17.1 million tons (100% P2O5, hereinafter the same), up 3.6% YoY, of which the outputs of diammonium phosphate (DAP) and monoammonium phosphate (MAP) were 7.1 million tons and 6.0 million tons, respectively, up 0.7% and 13.1%. The output of high-concentration phosphate compound fertilizers accounted for 90.8% of the total phosphate compound fertilizer output. The output of single superphosphate decreased drastically and the output of fused calcium magnesium phosphate fertilizers was basically equal to that in 2013. The output of low-concentration phosphate fertilizer was 1.56 million tons, accounting for only 9.2% of the total output.


Table 1    China's top 5 provinces for sulfuric acid output, 2014 (million tons)

Serial number?
    Sulfuric acid    Sulfur-based sulfuric acid    Sulfuric acid based on smelting?flue gas?    Pyrite-based sulfuric acid
    Province    Total output    Province    Output    Province    Output    Province    Output
1    Yunnan    14.3    Yunnan    9.5    Anhui    3.9    Guangdong    2.60
2    Hubei    9.4    Guizhou    6.9    Gansu    3.4    Anhui    2.50
3    Guizhou    7.8    Hubei    5.9    Yunnan    3.0    Hubei    2.30
4    Sichuan    7.0    Sichuan    4.4    Shandong    2.9    Yunnan    1.70
5    Anhui    6.6    Jiangsu    2.9    Henan    2.5    Sichuan    1.56


Table 2    China's top five sulfuric acid producers, 2014 (kt)


Serial
number    Sulfuric acid    Sulfur-based sulfuric acid    Sulfuric acid based on smelting?flue gas?    Pyrite-based sulfuric acid
    Producer    Total output    Producer    Output    Producer    Output    Producer    Output
1    Yunnan Yuntianhua?Group    6 940    Yunnan Yuntianhua?Group    6 940    Tongling Nonferrous Metals Group?    3 520    Jiangxi Copper
Corporation    920
2    Tongling Nonferrous Metals Group?    4 220    Guizhou Kailin Group Co., Ltd.    4 040    Jinchuan Group?Co., Ltd.    3 450    Tongling Chemical Industry Group?Co., Ltd.    740
3    Guizhou Kailin Group Co., Ltd.    4 040    Wylton?(China) Chemical Co., Ltd.    1 740    Jiangxi Copper
Corporation    2 250    Tongling Nonferrous Metals Group    700
4    Jinchuan Group?Co., Ltd.    3 450    Yunnan Xiangfeng Group    1 730    Shandong Xiangguang Group    1 530    Anhui Sierte?Fertilizer Industry Co., Ltd.    520
5    Jiangxi Copper Corporation    2 990    Hubei Xinyangfeng Fertilizer Co., Ltd.    1 460    Zijin Mining Group Co., Ltd.    1 460    Guangdong Zhanjiang Chemical Co., Ltd.    490


China’s basic fertilizers (DAP, MAP) of phosphate compound fertilizers are concentrated towards the four phosphorus producing provinces: Hubei, Yunnan, Guizhou and Sichuan. In 2014, the combined output of phosphate compound fertilizers in these four provinces accounted for 73.3% of the national total, the combined DAP output of the four provinces accounted for 77.9% of the national total DAP output, and the combined MAP output of the four provinces accounted for 74.7% of the national total MAP output. China’s top six provinces and cities of phosphate compound fertilizer output in 2014 are listed in Table 3.
The industrial concentration degree of China’s phosphate compound fertilizer sector has further improved. In 2014, there were a total of 273 phosphate compound fertilizer producers in China. Yunnan Yuntianhua Group, Guizhou Kailin Group Co., Ltd. and Wengfu Group had an output of more than 1.0 million tons each, and their combined output of phosphate compound fertilizers accounted for 30.9% of the national total. Thirteen large producers had an output of more than 300 kt each, and their combined output of phosphate compound fertilizers accounted for 61.2% of the total. There were 25 DAP producers in China. In 2014, the combined output of top ten DAP producers accounted for 86.1% of the national total DAP output. Among 61 MAP producers in China, the combined output of the top ten producers accounted for 54.3% of the total MAP output. China’s top six phosphate compound fertilizer producers of 2014 are shown in Table 4.


Table 3    China's top six provinces for phosphate compound fertilizer output, 2014 (million tons)

Sequence
number
    Phosphate compound fertilizer    DAP    MAP    P-NPK
    Province    Output    Province    Output    Province    Output    Province    Output
1    Hubei    4.7    Yunnan    2.3    Hubei    2.1    Hubei    0.6
2    Yunnan    4.3    Hubei    1.7    Yunnan    1.0    Shandong    0.5
3    Guizhou    2.3    Guizhou    1.4    Sichuan    0.8    Jiangsu    0.2
4    Sichuan    1.2    Anhui    0.3    Guizhou    0.7    Guizhou    0.1
5    Anhui    0.8    Guangdong    0.2    Anhui    0.5    Hebei    0.1
6    Shandong    0.7    Sichuan    0.2    Chongqing    0.3    Sichuan    0.1


Table 4    China's top six phosphate compound fertilizer producers, 2014  (kt)

Sequence
number    Phosphate compound fertilizer    DAP    MAP    Single superphosphate
    Producer    Total output    Producer    Output    Producer    Output    Producer    Output
1    Yunnan Yuntianhua?Group    2 680    Yunnan Yuntianhua?Group    1 810    Yunnan Yuntianhua?Group    650    Guangdong Zhanjiang Chemical Co., Ltd.    66
2    Guizhou Kailin Group Co., Ltd.    1 470    Guizhou Kailin Group Co., Ltd.    1 040    Hubei Xiangyun (Group) Chemical Co., Ltd.    490    Yunnan Anning   Chemical Fertilizer Co., Ltd.    48
3    Wengfu?Group    1 140    Wengfu?Group    860    Hubei Xinyangfeng Fertilizer Co., Ltd.    300    Yunnan Lufeng Qinpan Phosphor Chemical Co., Ltd.     46
4    Hubei Xinyangfeng Fertilizer Co., Ltd.    760    Hubei Yihua Group Co., Ltd.    620    Anhui Sierte?Fertilizer Industry Co., Ltd.    290    Yunnan Golden Star Chemical Co., Ltd.    44
5    Hubei Yihua Group Co., Ltd.    700    Tongling Chemical Industry Group?Co., Ltd.    470    Sinochem Chongqing Fuling Chemicals Co., Ltd.    280    Yunnan Xiangfeng Group    26
6    Tongling Chemical Industry Group?Co., Ltd.    640    Yunnan Xiangfeng Group    440    Wengfu?Group    280    Guangxi Lingshan Jiaofeng Chemical Fertilizer Co., Ltd.    24



2.2 China’s apparent consumption of phosphate compound fertilizers

In 2014, China’s apparent consumption of phosphate compound fertilizers was 13.4 million tons, down 5.1% YoY, of which the apparent consumption of DAP was 4.95 million tons, a YoY decrease of 8.2%. In 2014, the output of NPK (nitrogenous, phosphorus and potassium compound fertilizers) rose by 9.1%, so the apparent consumption of MAP was 4.97 million tons, being basically the same as that in 2013.

2.3 Significant export growth of phosphate compound fertilizers

In 2014, China’s net export volume of phosphate fertilizers reached 3.75 million tons, up 59.1% YoY. The export volumes (physical goods) of DAP and MAP were 4.88 million tons and 2.33 million tons, respectively. The export volume of phosphate compound fertilizers reached 4.06 million tons (100% P2O5), accounting for 23.8% of the total phosphate compound fertilizers output, of which the export volumes of DAP and MAP were 2.26 million tons and 1.07 million tons, respectively. The export volume of DAP accounted for 31.8% of the total DAP output, and the export volume of MAP accounted for 17.7% of the total MAP output. The export growth of DAP and MAP promoted the production of phosphate compound fertilizers. In spite of the slight reduction of domestic consumption, the total output rose considerably.

3. Projection of China’s sulfuric acid & phosphate fertilizer sector in 2015

3.1 China’s demand for phosphate compound fertilizers had limited growth

The amount of phosphate fertilizers applied in China peaked in 2012, declined in 2013 and 2014, and is unlikely to grow in 2015. Due to the implementation of scientific fertilization in the structural adjustment of phosphate compound fertilizers, water soluble fertilizer, slow/controlled release fertilizers, organic-inorganic fertilizer, liquid fertilizer and special fertilizer are being developed, the varieties of fertilizers are gradually changing, and the basic fertilizers are also changing.
The growth of wet process phosphoric acid capacity has great development prospects in the development of new phosphate compound fertilizer products and industrial phosphoric acid products, and at the same time, can effectively change the flow of phosphoric acid in the existing large phosphate compound fertilizer enterprises and increase the operating rate of the phosphoric acid units. This will be the highlight for increasing sulfuric acid consumption.

3.2 Export volume of phosphate compound fertilizers will increase considerably

Due to the relaxation of the export policy of phosphate fertilizers and the cancellation of the annual window period, in 2015, the export tariffs of phosphate compound fertilizers are adjusted to RMB100/t for DAP and MAP. Since 2014, in addition to India, China’s exporters of phosphate compound fertilizers have actively developed markets like Brazil and Southeast Asia, so China’s export volume of phosphate compound fertilizers will hopefully increase in 2015.

3.3 Smelting-based sulfuric acid promotes the constant growth of sulfuric acid output

In 2015, the output of sulfuric acid will grow constantly, mainly because new smelting-based sulfuric acid units will continue to play a role, for example Guangxi Jinchuan Nonferrous Metals Co., Ltd., Henan Zhongyuan Gold Smelter, and Henan Yuguang Gold and Lead Co., Ltd. as well as a new unit of Hunan Shuikoushan Nonferrous Metals Group Co., Ltd. that will be put into operation this year. Smelting-based sulfuric acid will still promote China’s growth of sulfuric acid output. The newly added output of sulfuric acid in the smelting-based sulfuric acid units will all enter into the market and increase the supply to the chemical fertilizer and chemical markets, making the phosphate compound fertilizer enterprises purchase more smelting-based sulfuric acid from the market.