Xinyangfeng (000902.SZ): The plant for the ammonia synthesis project has been built; it is expected that there will be a shortage of ferric phosphate in 2022

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Xinyangfeng (000902.SZ): The plant for the ammonia synthesis project has been completed. It is expected that there will be a shortage of ferric phosphate in 2022. Author/Source: Date: 2022-03-17 Clicks: 24 On March 11, Xinyangfeng (000902.SZ) stated in a meeting with representatives from institutions such as E Fund, ICBC Credit Suisse Fund, and HSBC that there is limited new production capacity in the ferric phosphate industry, and both industrial-grade ammonium phosphate and ferric phosphate are seeing rising prices. It is expected that there will be a shortage of ferric phosphate in 2022. The company’s lithium iron phosphate projects all adopt the approach of forming equity partnerships with downstream lithium iron battery manufacturers; by tying itself to these customers, it reduces investment risks and shortens the validation period. In the new energy sector, Zhongxiang has a production capacity of 200,000 tons per year for ferric phosphate, as well as a lithium iron phosphate project carried out in partnership with GEM (002340). The first phase of the 50,000-ton/year ferrophosphate project under the Zhongxiang 200,000-ton/year ferrophosphate project, which is being carried out in partnership with Longpan Technology (603906), is expected to start trial production by the end of this month. The 150,000 tons per year capacity for the second phase will be developed through multiple production lines, with operations starting gradually from August to December 2022; the products will be sold to GEM. It is expected that by 2023, 200,000 tons in Zhongxiang and 100,000 tons in Yidu, for a total of 300,000 tons per year, of iron phosphate will be able to go into production. In the compound fertilizer sector, urea prices rose by about 50% from May to August 2021; prices of phosphate and potassium fertilizers also increased significantly. In the fourth quarter, a drop in coal prices caused urea prices to fall sharply by 30%. Due to the special circumstances last year, raw material prices saw sharp rises and falls, with significant fluctuations. As a result, distributors became very cautious in their purchasing decisions, opting to first clear their inventories, which led to a sluggish market for compound fertilizers and inventory levels among downstream distributors reaching historic lows. Currently, the company’s sales performance is improving month by month. Raw material prices have remained high for 6-7 months; this year, the import price for large-scale potassium fertilizer contracts was set at $590 per ton, a significant increase compared to last year. As the peak season for using spring fertilizers approaches, distributors began to purchase large quantities of products in late February, and the company’s shipment volumes increased month by month. When introducing the progress of the ammonia synthesis project, Xinyangfeng stated that the factory building for this project has been completed, the equipment has been purchased from abroad and assembled, with commissioning expected to take place around June or July 2022. The ammonia synthesis project utilizes the state-of-the-art water-coal slurry production technology, which **helps reduce production costs and can basically meet the company’s own demand for ammonia at its three bases in Hubei.