Yellow phosphorus market sees few transactions under the impact of 2019-nCoV

Publish time:2/19/2020 12:00:00 AM      Source: CCM
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Summary: Upstream and downstream industries of yellow phosphorus faced transportation difficulties under the impact of 2019-nCoV and few transactions were seen. Yellow phosphorus manufacturers are expected to maintain low operating rates in the short term.

In early Feb. after the Spring Festival (late Jan. 2020), operating rates of domestic yellow phosphorus enterprises just reached 20%. Yellow phosphorus manufacturers in Hubei Province had still been suspending production. Only a few upstream and downstream enterprises of yellow phosphorus resumed production due to the latest 2019 novel coronavirus (2019-nCoV). Few transactions were made in the yellow phosphorus market because manufacturers could not ship yellow phosphorus out and raw materials could not be brought in as tough traffic restrictions had been imposed in different regions. 

Quotations of yellow phosphorus enterprises scarcely changed compared with that before the Chinese New Year, but such quotations were of little reference significance. Apart from affecting the follow-up production, the depressed market also increased cash flow pressures on yellow phosphorus enterprises in the short run. Given that the next few days will become the critical period of 2019-nCoV development, yellow phosphorus producers will face greater pressures before 13 Feb., 2020 as they could not completely suspend production or resume large-scale production. Thus, they tended to maintain low operating rates and seek for deals within provinces while interprovincial transportation can be more difficult due to traffic restriction by different provinces. Under current circumstances, enterprises will face difficulties transporting yellow phosphorus before 13 Feb., 2020.

Most downstream customers of yellow phosphorus said that they would resume production after the Lantern Festival (8 Feb., 2020). They are likely to raise prices of their products under tight supplies of yellow phosphorus in the short run as they kept low inventories before the Spring Festival. Nevertheless, yellow phosphorus supplies will edge up as yellow phosphorus manufacturers gradually resume production.

The market of phosphorus ore remained stable and manufacturers scarcely changed their quotations. Prices of 30% phosphorus ore fluctuated between USD47.65/t (RMB330/t) and USD59.21/t (RMB410/t).

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