Thread Content
2008 will be a year remembered by history. We have **successively experienced some unpredictable, historically rare major events and challenges. Especially affected by the international financial crisis, the economic environment both internationally and domestically has deteriorated sharply since the second half of the year, which has had a severe impact on the sulfuric acid industry; demand for fertilizers and industrial acids has dropped significantly, leading to serious overcapacity. Faced with difficult circumstances, the Sulfuric Acid Association adheres to its long-standing mission of \"serving enterprises, serving the industry, and serving **\", carries out all necessary basic tasks in a diligent manner, conducts thorough research, and uses information as a basis to promptly disseminate operational and predictive data to the entire industry ； Report industry issues to the relevant **departments and provide policy recommendations ； Establish extensive connections with domestic and international sulfur resource organizations, and actively explore the sulfur resource market ； Further advance the industry’s circular economy and energy conservation and emission reduction efforts, and actively seek support for **major key projects ； New methods such as capital market financing were explored to address funding issues for corporate industrial upgrading, thereby making contributions to the stable development of the industry. I. Thoroughly carry out work on the core fundamental information of the industry, and actively build a comprehensive informational network for it, so that industry management can be based on facts and ongoing monitoring. The market situation in 2008 was like a rollercoaster. At the beginning of the year, due to rising international energy prices and increased demand for bioenergy, world food prices climbed, leading to a food crisis in 38 countries. International fertilizer prices also rose sharply, and with the growing use of wet-process metallurgy on an international scale, the prices of its key raw materials, sulfur and sulfuric acid, increased significantly as well. To **ensure** food security, our country has strictly controlled the export of fertilizers and their raw materials; it raised the temporary tariffs on such exports on three occasions during the first and second quarters, as well as introducing special export tariffs, thereby reducing our country’s demand for sulfur resources. In September, amid the global financial crisis and slowing economic growth, international sulfur prices plummeted suddenly. Within just 2 months, the highest CIF price in August of $810 per ton dropped to $40–50 per ton, while the price of pyrite fell from over $1,300 per ton to around $200 per ton ； The extremely sluggish domestic phosphorus compound fertilizer market, along with a significant decline in demand for industrial acids, has caused the price of sulfuric acid to drop from over 2,100 yuan per ton to between 250 and 120 yuan per ton. A large number of facilities have stopped production; the overall operational rate across the country is low. It is difficult to dispose of inventory of expensive raw materials and high-cost products, and companies are facing risks of breaking their cash flow chains. What’s more serious is that as the impact of the international financial crisis on China’s real economy becomes increasingly apparent, this situation will not improve significantly in the short term. In this rapidly changing environment, and in the face of the challenges faced by the industry and its companies, the association gives top priority to collecting basic industry information. It strives to provide companies with timely and valuable first-hand data, offering insights based on industry perspectives regarding supply and demand as well as market forecasts, thereby assisting companies in planning their operations and development. 1. Collect data. Careful collection, compilation, and analysis of corporate data, statistics bureau data, customs data, and international relevant data are carried out to produce industry operation reports: these reports describe the performance of the industry, identify existing problems, and propose solutions and policy recommendations. Regular meetings are held with information statisticians from enterprises and provincial associations to standardize statistical methods, unify reporting systems, resolve issues arising in statistics, increase the amount of textual information included in reports, establish a database of enterprise information specialists, and strengthen internal communication; at the same time, the aggregated information from the associations is fed back to these enterprise information specialists. 2. Strive to expand information sources and improve the industry data system. As global economic integration accelerates, no industry is any longer isolated; there are increasingly more factors to take into account in economic operations. To adapt to the evolving industry landscape, the association obtains some important information through equivalent exchange on one hand, and purchases such information with limited funds on the other. At present, the association possesses a database that includes directly reported data from enterprises, reports from provincial associations, data from statistical bureaus, customs data, data from relevant industry associations, as well as data from international organizations and well-known domestic and foreign consulting, trade, and media agencies – all of which serve as the basis for our market analysis. 3. Pay attention to information dissemination channels and fully leverage the value of information. Only channels that are open in both directions are meaningful. How to convey valuable information to a company promptly so that those who need it can see it is an important aspect of information networks. To this end, we make efforts in three aspects: first, we strengthen the information updates on the “China Phosphorus and Sulfur Network” to turn it into the main platform for releasing industry information. This year, Phosphorus and Sulfur Network received 3.94 million visits in total, with an average of 330,000 visits per month, representing increases of 19% and 9% respectively compared to the same period last year ； Second, further expand the scope of the \"top leader initiative\" and refine it by using email to promptly convey, in a structured manner, important industry information such as data, issues, forecasts, recommendations, major events, and key topics to the leaders of relevant enterprises. This year, a total of 14 regular issues and 9 special issues of the \"Top Leader Project Brief\" were published, covering major events both within and outside the industry, and they were well received by enterprises. Third, strengthen **guidance and media promotion. As the industry situation deteriorates, in order to enhance publicity and increase the industry’s influence, this year we have collaborated with relevant media outlets within and outside the industry to provide objective and positive coverage of the industry’s current situation and the challenges it faces, using the media’s power to highlight these issues. At the same time, the association takes advantage of all industry conferences to disseminate information, whether they are executive board meetings, industry annual meetings, or thematic seminars. As the situation became urgent after October, the association held a special meeting on sulfur during the Weifang exhibition, inviting experts from renowned domestic and international institutions to provide a comprehensive overview and analysis of the global supply and demand situation for sulfur, as well as to introduce the status of sulfur resources in China. Through various forms of outreach, it was successful in unifying the industry’s understanding of the situation, and the entire sector worked together to address the challenges. Industry statistics form the foundation of the work carried out by industry associations. In an economic environment marked by significant changes in both domestic and international markets, we rely on this fundamental aspect of the industry, gathering data from various sources, compiling and analyzing it, using numbers to speak and facts to persuade. Through networking and information exchange, and by maintaining internal channels as well as connections with the media, we gradually build a comprehensive information network that continuously provides a true and objective portrayal of the current situation in the sulfuric acid and phosphate fertilizer industries. This enables companies, the industry as a whole, and management to draw on this information, use it for decision-making, stay alert, and benefit from it. It ensures that all related industry management activities are based on facts and ongoing monitoring – and this is the purpose of our information work. This year, we did it. II. Fully leverage the industry’s early-warning function to secure favorable (proactive) policies during difficult times in industry development. With the rapid development of China’s sulfuric acid phosphate fertilizer industry, its rising position in the global sulfur-phosphorus market, and the continuous changes in the international economic environment, the association has adjusted the role of its early-warning system for potential damage to the phosphate compound fertilizer and sulfuric acid industries. It has added more functions, shifting from merely monitoring and assessing the impact of imported goods on these industries to conducting two-way evaluations and providing early warnings regarding the effects of both imports and exports, thereby balancing the overall supply and demand in the industry to achieve balanced development. This year, in addition to the monthly warning reports, there are also 4 special reports covering the production situation following ice and snow disasters, as well as the challenges faced by the phosphate fertilizer and sulfuric acid industries after June. Urgent requests have been made for policy support such as appropriate exports of phosphate fertilizers and subsidies for expensive raw materials like sulfur. In addition, it is necessary to continue publishing a <Warning Special> issue every two months, compiling summaries of issues arising in the industry’s operations, relevant suggestions, as well as major domestic and international events, and submitting them to the Bureau of Industrial Damage Investigations under the Ministry of Commerce. This enables them to gain a comprehensive understanding of the industry’s situation and to focus their investigations on key issues; thereafter, the bureau selects the most important summaries and reports them to the State Council in the form of internal publications. At the same time, our team of early warning experts played a vital role during difficult times in the industry. During the Weifang exhibition in late October this year, the association convened two expanded meetings of experts specializing in early warnings to assess the situation, discuss countermeasures, and strengthen confidence. After the meeting, the experts’ opinions will be submitted to the Industry Investigation Bureau and the State Council. Policies such as the exemption of tariffs and value-added tax on imported sulfur, and the timely adjustment of export tariffs for phosphate fertilizers, have all benefited greatly from the role of early warning systems. III. Actively promote major industry projects and strengthen efforts in energy conservation, emission reduction, and comprehensive resource utilization. At the Central Economic Work Conference held on December 8 this year, ***** pointed out when outlining the key tasks for economic work next year that it is necessary to focus on improving independent innovation capabilities and enhancing industrial coordination, optimize the industrial structure, and make efforts to break through the key technologies that hinder the transformation and upgrading of industries. It is also essential to comprehensively strengthen efforts in energy conservation, water conservation, land conservation, material conservation, and comprehensive resource utilization, with a particular emphasis on advancing key projects related to energy emission reduction and ecological environment protection. In line with the central government’s directives, the association focused its industry efforts during the 11th Five-Year Plan period on energy conservation and emission reduction, promoting the comprehensive utilization of resources, and increasing the efficiency of sulfur resource utilization, aiming to transform sulfuric acid production facilities into energy plants. 1. Promote the adoption of low-temperature heat recovery technology in large-scale sulfuric acid production facilities, while simultaneously carrying out CDM projects. China’s sulfuric acid production volume is nearly 60 million tons; in the cases of sulfuric acid produced from minerals and sulfur, over 80% of the production capacity allows for the recovery of 47 million tons of high- and medium-pressure steam each year, which is equivalent to saving 6.6 million tons of standard coal ； By utilizing advanced technologies for energy recovery, the waste heat recovery rate in sulfuric acid production can increase from over 60% to over 90%; approximately 10 million tons of low-pressure steam can be recovered, which is equivalent to an additional 1.5 million tons of standard coal saved. The amount of steam produced and recovered across the entire industry is equivalent to the energy generated by developing a large coal mine. To this end, we continue to introduce low-temperature heat recovery technology into large and medium-sized facilities, while carrying out CDM (Clean Development Mechanism) projects to secure international financial support. To date, 12 units from 4 companies in the industry have adopted HRS technology. The existing plants include the Shuangshi Zhangjiagang plant with a capacity of 1*1 million tons per year, and the Yihua Group plant with a capacity of 2*600,000 tons per year. The plants under construction include Sinochem Fuling’s 2*600,000 tons/year plant, Shuangshi Zhangjiagang’s 1*1 million tons/year plant, Yuntianhua International Sanhuan’s 2*600,000 tons/year plants, Yuntianhua International Furui’s 2*800,000 tons/year plants, Yuntianhua International Yunfeng’s 300,000 tons/year plant, and Yuntianhua International Red Phosphorus’s 800,000 tons/year plant. At present, Yihua and Fuling have successfully registered CDM projects; the Shuangshi Zhangjiagang CDM project is in the final public announcement stage, while the Yuntianhua International CDM project is in the preliminary preparation phase. It is expected that they will be completed and successfully registered one after another next year. Assuming a payback period of 4 years, and using a conservative estimate, the total amount of CO2 emissions reduced by these 12 projects is approximately 5.8 million tons. At the minimum price of CERs set by the National Development and Reform Commission, which is 9 euros per unit, the earnings from emission reductions amount to around 500 million yuan; thus, the economic and social benefits are quite significant. 2. Attempt to initiate bundled projects for the recovery of low-temperature heat energy in large and medium-sized sulfuric acid production facilities by utilizing new mechanisms. In order to assist enterprises in installing HRS technology in existing or newly built facilities and to address the issue of funding, the association, in collaboration with China Energy Recovery Co., Ltd./Shanghai Hailu Kunlun High-Tech Engineering Co., Ltd., has organized such bundled projects (making use primarily of the mature HRS technology and systems developed by Memmok in the United States). Additionally, it has joined forces with Shanghai Yangtze River Delta Investment Consulting Co., Ltd. to submit CDM project applications in order to participate in the international carbon trade. The initial investment required for building an HRS facility is relatively high. Currently, in addition to corporate funds and bank loans, bundled projects offer another source of financing; China Energy Recovery Co., Ltd. (CER)/Shanghai Hailu Kunlun High-Tech Engineering Co., Ltd. (HAIE), which are listed on the OTCBB in the United States, can provide funding for the construction of such facilities using a BOT operation model. This project is organized and coordinated by the association; preliminary research has been conducted on sulfuric acid production plants with a capacity of over 300,000 tons, and small introductory meetings have been held in the Jiangsu and Zhejiang regions. 1-2 pilot companies are planned to be selected to carry out the initiative first, followed by its rollout across the industry, in order to reduce corporate investment risks and costs and improve the technical level of equipment in this sector. 3. Complete the final preparations for the waste generation and discharge system, and assist Qingdao University of Science and Technology with the preliminary work related to the emission standards for sulfuric acid waste. The sulfuric acid industry is a major source of wastewater and exhaust gas emissions. Treating wastewater and reducing SO2 levels in exhaust gases is necessary for environmental protection and for the development of a harmonious society. The work on calculating the industry’s emission and discharge coefficients, which began in 2007, continued until this year, and all related tasks were completed. The two-year effort to establish emission and discharge coefficients has been of great help in determining the emissions of waste substances in this industry as well as in setting standards for such emissions. Based on this, the association informs the industry about the current situation regarding waste emissions, proposes plans for addressing these emissions in the sulfuric acid industry going forward, and identifies the key technologies that need to be developed in order to solve the problem of waste emissions in this sector. Key technologies for the emission control of sulfuric acid-related waste include, first, the critical equipment for purifying dilute acid produced from mineral sources. Power wave washers, high-efficiency electrostatic precipitators, high-efficiency electrostatic foggers, and plate-type dilute acid coolers should be adopted in the purification systems of large and medium-sized plants, in order to enable a closed-loop system for handling dilute acid and reduce wastewater discharge. At the same time, further improvements should be made to technologies and equipment related to slag humidification, wastewater sedimentation, and the comprehensive utilization of slag, in order to enhance efficiency and help make the production of sulfuric acid from pyrite and through smelting processes more aligned with clean production standards. At present, the Ministry of Environmental Protection has assigned the task of formulating standards for the discharge of sulfuric acid waste to Qingdao University of Science and Technology. Although these are not standards developed within our industry, in order to ensure that such standards are in line with the current conditions in the industry and can help reduce emissions, the association is actively involved in this process by providing information on the industry, assisting with research, and playing a role in the formulation of these standards in the future. IV. Carry out extensive international exchanges and cooperation to actively explore sulfur resources. Although China’s sulfuric acid production has ranked first in the world for five consecutive years since 2003, the country is short of sulfur resources. Among the 13 rare resources for which enhanced exploration is required, as announced by the Ministry of Land and Resources this year, sulfur ore is one of them; currently, the reserve capacity of sulfur available in China, both those that are currently usable and those that can be made usable in the near future, will only last for about 10 years ； China’s sulfur production is low, with imported sulfur accounting for 90% of its sulfur consumption ； Together with the sulfur brought in by imported non-ferrous metal ores, China’s dependence on foreign sources for sulfur resources is close to 60%, and this high degree of reliance is unlikely to decrease before 2010. As the world’s largest consumer of sulfur, and amid a complex and changing international landscape, the association has established extensive contacts and cooperation with various international sulfur organizations, striving to develop and expand China’s sulfur resource market. 1. Utilize coordination mechanisms to import sulfuric acid in an orderly and appropriate manner, thereby providing sulfur resources for fertilizer manufacturers in areas along rivers and coasts. In 2008, Japan and South Korea exported approximately 1.7 million tons of smelting acid to our country. Although the volume of imported acids accounts for less than 4% of China’s sulfuric acid production, it makes up around 10% of China’s sulfuric acid trade volume, thus having a significant impact on China’s sulfuric acid market. In order to make full use of this sulfur resource and supply acid for phosphatic fertilizer manufacturers in regions such as Zhongya, Zhanhua, Liuguo, Wengfu, and Shandong, as well as for some potassium sulfate producers, while minimizing any impact on the domestic market for commercial acid, the association has done a great deal of work to coordinate the import of sulfuric acid. After several years of effort, a coordination mechanism was established under the leadership of the association, with smelters from Japan and South Korea as its main members; regular meetings are held to exchange information, analyze supply and demand situations, and address issues related to imported acid. Since the beginning of this year, the association has convened meetings with smelters from Japan and South Korea in March, June, and December respectively, to explain the domestic situation regarding sulfuric acid and to offer suggestions and recommendations regarding the import of such acid. In the first half of the year, when sulfur resources were in short supply and raw material prices soared in our country, imported sulfuric acid played a role in helping fertilizer manufacturers in coastal areas maintain their production. At the seminar in December, the association emphasized that the domestic sulfuric acid market was sluggish in 2009, with declining demand, and imported sulfuric acid would become a sensitive commodity. We reiterate the three principles regarding sulfuric acid imports, pointing out that the East China region has the most severe overcapacity in sulfuric acid production, and hope to reduce exports to this area and gradually shift to fertilizer manufacturers in other regions. 2. Strengthen ties and cooperation with IFA, TSI, and sulfur resource suppliers. As the world’s largest importer of sulfur, changes in China’s demand play a significant role in determining international sulfur prices. IFA, TST, and related organizations also pay close attention to the changes in the Chinese market, and their ties with associations are becoming increasingly strong. In addition to meeting regularly for exchanges, they are also participating more and more in events organized by each other. In March this year, the association was invited to attend the TST annual conference, where President Qi Yan’s presentation was awarded the best presentation of the event. In May and October of this year, TSI leaders attended the annual meetings and production and sales conferences organized by the association. Close ties and cooperation have made China an important part of the international market. At the same time, the association maintains good communication and ties with the Kazakhstan Chamber of Commerce and Industry, Chevron, Shell, as well as various international sulfur resource organizations, in order to explore the sulfur resource market from multiple perspectives. V. Preparation of major industry planning reports and provision of technical consulting services for enterprises: At the request of the National Development and Reform Commission, the Ministry of Science and Technology, and other agencies, the association collaborated with other associations to prepare a report on the key technologies relevant to China’s sulfuric acid industry. This report identified the key technologies that require research and development as well as dissemination in this industry over the next 5–10 years, with the aim of securing support from the Ministry of Science and Technology for research and development efforts, as well as support from the National Development and Reform Commission for projects aimed at promoting advanced technologies. A pollution control plan for the sulfuric acid industry, as well as pollution control measures for this industry, were formulated. The sulfuric acid industry is a fundamental sector in the chemical industry. Although wastewater treatment and SO2 emissions from the acid production process have been largely resolved in large-scale facilities, 30% of smaller and medium-sized plants still face unresolved issues in this regard, and this is a problem that the industry needs to address actively in the coming years. At the same time, the association has become an important advisory body for the sulfuric acid industry nationwide; organizations, industries, enterprises, and institutions that are involved in matters related to sulfur, sulfuric acid, as well as related markets and products all turn to the association for advice. We have prepared market research and technical consultation reports on sulfur, sulfuric acid, and related products for various institutions and enterprises. VI. The renewal of the association’s board of directors was completed successfully, enhancing the association’s cohesion. This year, the term of the fourth board of directors of the association came to an end. In May, the association held its fifth member representative conference in Nanchang. Nearly 400 representatives from 300 member organizations attended the meeting, where comprehensive summaries were provided of the achievements made by the sulfuric acid industry during the fourth term of the association’s board of directors from 2004 to 2007 in terms of production capacity and volume, process technology and equipment, energy conservation and emission reduction, as well as comprehensive resource utilization. The current state of the industry and its prominent challenges were discussed, and directions for future development as well as goals for industrial structure upgrading were outlined. At the same time, the conference elected a new council, appointing leaders from 110 companies as members of the association; 43 of these leaders served as executive directors. Comrade Qi Yan was elected as the new president of the association, while 21 others including Wang Chiwei were appointed as vice presidents, and Wu Xuemei was appointed as the secretary-general. The first executive council meeting of the fifth term affirmed the work carried out by the association in its previous term, recognizing that its permanent bodies had done a great deal of work during that period – in particular, they excelled at reflecting the industry’s conditions to members, conveying industry-related information to them, and serving as a link and bridge between the industry and enterprises – thereby enabling the industry to achieve leapfrog development. It also put forward hopes and requirements for the work of the new council. This year, 10 new members joined the association, bringing the total number of members to 460 at present, with membership fees increasing year by year. Despite the rain, snow, and freezing weather that hit the south this spring, the major earthquake in Sichuan in May, and the obstacles to exports in the industry, the payment of membership fees was relatively good. Notably, companies in the severely affected areas of Sichuan such as Hongda Group, Yingfeng Company, and Jinhe Phosphorus Mine all paid their fees as required. VII. Key tasks for 2009: The international financial crisis intensified, spreading rapidly from a localized issue to a global one, from developed countries to emerging markets and developing countries, and from the financial sector to the real economy. In 2009, there was a clear increase in factors of instability and uncertainty, and the entire macroeconomy, including the sulfuric acid industry, faced an unprecedented tough period. Our country has recently implemented proactive fiscal policies and relatively loose monetary policies, taking a series of measures to boost domestic demand and ensure steady and rapid economic growth. This gives us confidence for the future. With the comprehensive strength and risk resistance capabilities accumulated over 30 years of reform and opening up, we believe that the winter will not last long, and the spring for this industry is bound to arrive. Given the current situation, the key priorities for the association’s work next year are: 1. Closely monitor the development of macroeconomic and industry trends, accelerate information gathering and research efforts, and provide valuable advice to enterprises and ** ； 2. Complete all tasks assigned by various **departments, and serve as a link and bridge between the enterprise and ** ； 3. Further strengthen early warning efforts and seek reasonable policy support for the phosphoric acid fertilizer industry ； 4. Vigorously strengthen efforts in energy conservation, emission reduction, and the treatment of waste materials within the industry. Continue to advance the introduction and localization of low-temperature heat recovery technologies, pay attention to and promote new technologies for desulfurization and sulfur recycling, and make efforts in areas such as industry technological innovation, extending the industrial chain, and recovering sulfur resources ； 5. Strengthen international exchanges and cooperation to further enhance the association’s cohesion and influence. Pay attention to the impact of imported sulfuric acid and imported sulfur on the market. 6. Strengthen ties and cooperation with the media, enhance their guiding role, and create a positive social environment that is conducive to the further development of the industry.