Zhong Guo Jing Ying Bao·2025-08-29 10:28Core Viewpoint - The performance of phosphate chemical companies is under pressure in the first half of 2025 due to market supply-demand fluctuations and rising product costs [1][2]. Financial Performance - Xingfa Group reported a revenue of 14.62 billion yuan, a year-on-year increase of 9.07%, but a net profit of 727 million yuan, down 9.72% year-on-year [2]. - Hubei Yihua achieved a revenue of 12.005 billion yuan, a year-on-year decrease of 8.98%, with a net profit of 399 million yuan, down 43.92% [2]. - Chuanfa Longmang reported a revenue of 4.7 billion yuan, a year-on-year increase of 16.77%, but a net profit of 239 million yuan, down 18.69% [2]. Market Dynamics - The phosphate chemical industry is experiencing profit contraction due to a combination of economic downturn and supply-demand mismatches [2]. - In 2024, China's phosphate rock production reached 113.528 million tons, a year-on-year increase of 7%, while the production of monoammonium phosphate rose to 11.3 million tons, up 5.9% from 2023, leading to increased supply [2]. - Demand for phosphate fertilizers is weak due to fluctuations in agricultural product prices and changes in planting structures, affecting farmers' fertilization enthusiasm [2]. Cost Pressures - Rising costs are eroding corporate profits, with domestic phosphate resources primarily of low to medium grade, leading to high extraction costs [3]. - The tightening of domestic mining rights has pushed some companies to import phosphate rock, increasing procurement costs due to international market price fluctuations [3]. - Environmental regulations are becoming stricter, leading to increased costs for waste treatment, further squeezing profit margins [3]. Strategic Adjustments - Phosphate chemical companies are actively adjusting their development strategies and promoting integrated industrial chain layouts to cope with declining performance [4]. - Xingfa Group is advancing towards fine and high-end development, with projects in lithium iron phosphate and electronic-grade ammonia water [5]. - Hubei Yihua is also focusing on high-end new energy and new material projects, expanding its coal mining business and increasing production capacity in urea and PVC [5]. Industry Outlook - The global fertilizer consumption is projected to reach 205 million tons in 2025, with domestic consumption around 72 million tons, and the market size expected to reach 320 billion yuan [3]. - The industry is expected to see structural oversupply in nitrogen and phosphate fertilizers, with prices likely to decline overall in 2024, but a potential improvement in supply-demand dynamics in the second half of 2025 [3]. - Companies are encouraged to optimize product structures and increase R&D investments to transition towards high-end and refined products, particularly in the lithium iron phosphate sector [6].