Environmental protection inspection to keep stringent in H2 2013

The 2013 (5th session) Development Symposium of China's Glyphosate Industry (hereinafter referred to as the Symposium) was successfully held in Jinan City, Shangdong Province during 17-18 July, 2013. During the Symposium, it was revealed that the environmental protection inspection against glyphosate/PMIDA manufacturers in China will remain stringent in H2 2013. Therefore, the supply of glyphosate will be tight, which will contribute towards maintaining the high prices of glyphosate products in H2 2013, according to Glyphsoate China Monthly Report issued by CCM in August.

Wang Xiaomi, the director of Pollution Prevention and Control, China's Ministry of Environmental Protection, revealed that the Inspection (China's Ministry of Environmental Protection released document No.: [2013] 57—Notice Regarding the Environmental Protection Inspection against Glyphosate (PMIDA) Manufacturers (hereinafter referred to as the Inspection) on 21 May, 2013) will remain stringent in H2 2013. Wang highlighted the 2 aspects for this decision.

Firstly, the stringent inspection will help to create a more rational competitive environment for the glyphosate/PMIDA manufacturers in China. Wang stated that glyphosate/PMIDA manufacturers which fail to pass the Inspection requirements will have their ability to survive gradually eradicated. Glyphosate/PMIDA manufacturers that succeed in passing the Inspection requirements and obtain the qualification will significantly benefit by acquiring the market share left by small and medium glyphosate/PMIDA manufacturers that have failed the Inspection.

Lower or a lack of investment into waste treatment has enabled small and medium manufacturers to compete with mainstream manufacturers to the detriment of the environment. At present, the glyphosate products prices of many small and medium glyphosate/PMIDA manufacturers are more competitive than the mainstream manufacturers' prices. One of the most important reasons for this is that the production cost for small and medium manufacturers is lower. This is due to their lower, or lack of investment into the treatment of glyphosate waste. Wang stated, "It means that the waste treatment capacity of glyphosate industry in China will be greatly enhanced when there are many glyphosate/PMIDA manufacturers succeeding in passing the requirement of the Inspection in the glyphosate industry, and the environmental pollution incidents caused by glyphosate/PMIDA manufacturers will be fewer and fewer".

Secondly, the positive effects of stringent environmental inspection against the glyphosate industry will set an example for other pesticides sectors in China.

"Glyphosate is the first pesticide to undertake environmental protection inspections in China, and at present the glyphosate industry is the eleventh industry to undertake environment protection inspections.  China has implemented environmental protection inspections in the citric acid industry, rare earth industry and other industries", said Wang. "We hope that the stringent environmental protection inspections can solve problems in the glyphosate industry such as overcapacity, backward waste treatment technology, etc., which will set a good example for other pesticides' environmental protection inspection in the future".

At present, some pesticides suffer from overcapacity or have serious environmental pollution problems in China. However, the next pesticide to undergo an environmental protection inspection is uncertain. Zhuang, a director of a top fungicide manufacturer in China, said that the fungicide——carbendazim will be the next pesticide for environmental protection inspection in China. The initiation time will depend on the final result of the environmental protection inspection on the glyphosate industry.

Glyphosate/PMIDA manufacturers have differing opinions regarding the stringent environmental protection inspection on glyphosate/PMIDA manufacturers. Some manufacturers support the Inspection.

Liu, a manager of CAC Group Co. Ltd, believes that the Inspection is very necessary for the glyphosate industry because it can eliminate rogue small and medium glyphosate/PMIDA manufacturers in China. Guan, a manager of Jiangsu Kuaida Agrochemical Co. Ltd, said that his company supports the Inspection because the Inspection's advantages outweigh the disadvantages for glyphosate industry. Guan also revealed that his company would actively apply for the Inspection.

However, other manufacturers were reluctant to apply for the environmental protection inspection.

Guo, a manager of Redsun Group Co. Ltd stated that his company must apply for the environmental protection inspection if his company wants to keep glyphosate business. Jiang, a manager of Chongqing Fenghua Technology Co. Ltd said that his company has no choice but to apply for the environmental protection inspection, even though glyphosate is not his company's main business.

The other issue of concern for glyphosate/PMIDA manufacturers is whether there will be many new policies and/or regulations pertaining to the glyphosate/PMIDA industry.

New policies and regulations about glyphosate/PMIDA industry will be released. Wang stated that although a glyphosate/PMIDA manufacturer may voluntarily apply for environmental protection inspection, the manufacturer will be required to provide the certification for passing the Inspection when seeking administrative licensing and/or approval. 

Also, China's Ministry of Environmental Protection plans to formulate policies and/or regulations against glyphosate industry with other Chinese governmental departments, including China's Ministry of Commerce, China General Administration of Customs, the Institute for the Control of Agrochemicals, Ministry of Agriculture (ICAMA), China Crop Protection Industry Association (CCPIA), and other departments.

Li Xiaoni, vice president of the China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters, stated that in July 2013 she proposed to the China's Ministry of Commerce that glyphosate products should only be granted an export license upon the completion of an Inspection. Li also revealed that this proposal needs the cooperation of the China General Administration of Customs.

Li Zhengxian, secretary-general of the CCPIA, said that the CCPIA would propose to the ICAMA that the ICAMA require the certification for passing the environmental protection inspection when a company applies for the registration of glyphosate products. Li also revealed that the CCPIA has many proposals regarding the glyphosate industry, including licensing and approval of expanding or constructing new glyphosate capacity, and tax incentive measures.

Overall, there will be 4 categories of policies and regulations which may be formulated by the relevant governmental departments following the completion of the Inspection at the end of 2015. The 4 categories are as follows:

1). Administrative licensing and approval policies and regulations, including industry access, product registration, production approval and mandatory production plans.

2). Trade policies and regulations, including export quotas and export licensing.

3). Tax policies and regulations, including the comprehensive utilization of resources income tax, value added tax concessions, export tariffs, etc.

4). The elimination of policies or regulations that encourage backward production technologies.

If the environmental protection inspection remains stringent in H2 2013, the supply of glyphosate will be tight. This is good news for glyphosate/PMIDA manufacturers that have the ability to complete waste treatment. The tight supply will contribute to   perpetuating   the high prices of glyphosate products in H2 2013.

Table of Contents of Glyphsoate China Monthly Report 1308:

Sichuan Shuncheng accomplishes trial run of 90,000t/a PMIDA production line

The revenue of Monsanto in the past nine months of fiscal year 2013 increases by 11%

Brief overview of 2013 Development Symposium of China’s Glyphosate Industry

Environmental protection inspection to keep stringent in H2 2013

94% glyphosate products pass national quality check in Q2 2013

Chlor-alkali co-production to lead the treatment technology of glyphosate waste water

Thirteen glyphosate registrations in July 2013

Glyphosate technical price sees a significant increase in Aug. 2013

Export volume of glyphosate technical decreases by 11.45% in June 2013

Review of Chinese glyphosate export in H1 2013

Glyphosate China Monthly Report, a monthly publication issued by CCM on 20^th, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

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Environmental protection inspection storm to attack glyphosate industry

According to CCM’s latest monthly report, Glyphsoate China Monthly Report issued in June, On 21 May, 2013, China's Ministry of Environmental Protection released a document—Notice Regarding the Environmental Protection Inspection against Glyphosate (PMIDA) Manufacturers (No.: [2013] 57 and hereafter the document in short), showing that China's Ministry of Environmental Protection will carry out a series of environmental protection inspection against glyphosate and PMIDA manufacturers in China from now on. And the inspection will last to the end of 2015, and China's Ministry of Environmental Protection will altogether bulletin the list of glyphosate and PMIDA manufacturers succeeding in passing the requirements of environmental protection inspection in three batches.

According to the document, China's Ministry of Environmental Protection and provincial environmental protection departments will participate in this inspection. Provincial environmental protection departments are responsible for the first check on the applications for inspection from glyphosate and PMIDA manufacturers, and China's Ministry of Environmental Protection will be together with experts from China Petroleum and Chemical Industry Association and China Pesticide Industry Association to second check the applicants. 

The list of first batch glyphosate and PMIDA manufacturers succeeding in passing the requirements of environmental protection inspection will be bulletined by the end of 2013, and then the lists of the second and the third batches by the end of 2014 and 2015 respectively.

The inspection content contains 2 main sectors and 13 finesorted sectors. The two main sectors are "The implementation status of environmental protection laws and regulations" and "The treatment facilities' completeness in environmental protection and its operational effect".

It's the first time for China's Ministry of Environmental Protection to carry out such an environmental protection inspection against glyphosate and PMIDA manufacturers in China with such large scale (the inspection period lasts for about 2 years and 6 months), but the inspection effect for glyphosate industry is uncertain in a short period.

On one hand, this inspection adopts the principle of voluntary, meaning that glyphosate and PMIDA manufacturers in China won't be forced to apply for inspection. On the other hand, the document doesn't set any punitive measures against the glyphosate and PMIDA manufacturers failing to pass the requirements of environmental protection inspection.

On the whole, this inspection is a good try for the future development of China's glyphosate industry. This inspection is just like a signal showing that Chinese government attaches great importance to glyphosate industry and environmental protection, meaning that more and more policies or regulations about pesticide industry including glyphosate industry are likely to be released in the coming years.

Besides, although there aren't punitive measures, this inspection still transmits a signal to the glyphosate and PMIDA manufacturers in China that strictly implementing environmental protection laws and regulations and completely constructing waste treatment facilities will be the key for them to survive from the market in the coming years.

Table of Contents of Glyphsoate China Monthly Report 1306:

Nantong Jiangshan issues short-term financing bond.

Anhui Huaxing accomplishes non-public issuing stock plan.

Hengyang Roymaster's Jinyan Chemical Plant is ordered to rectify for environmental illegality.

Environmental protection inspection storm to attack glyphosate industry.

Air pollutant emission standard for pesticide industry to be released by the end of 2014.

China's glyphosate companies actively expand overseas business.

Result of glyphosate use survey for 2012 late rice planting in Hunan province.

Glyphosate ammonium salt is the mainstream registration in May 2013.

Glyphosate technical price decreases slightly in June 2013.

The export volume of glyphosate technical decreases 14.31% in April 2013.

Glyphosate China Monthly Report, a monthly publication issued by CCM on 20^th, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis, and Consultancy Service. 

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
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Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Round-up of China’s Glyphosate Intelligence in Q1 2013

On 27^th June, 2013, CCM is going to hold a free webinar to share the latest intelligence on China’s glyphosate market in Q1 2013. Since 2011, CCM has held several webinars in relation to China’s glyphosate industry. The upcoming webinar features the following highlights

Impacts Resulted from the Cancellation of 13% Export Rebate Rate on PMIDA

After the cancellation of 13% export rebate rate on PMIDA, Chinese PMIDA manufacturers are likely to suffer higher export cost. In order to mitigate the cost pressure, they have to increase their export price. However, during the past several months, the ex-factory price and the export price of PMIDA in China have remained stable as the overseas demand for PMIDA is not quite large. Influenced by the limited overseas demand, the ex-factory price has not shown a drastic increase. The ex-factory price fluctuated between $17,000/ton and $17,700/ton in Q1 2013.  

Export Dynamics

The total A.I. volume (100% glyphosate acid equivalent) of China's exported glyphosate related products in Q1 2013 increased by 74% and 39% over Q1 2011 and Q1 2012, with the total export value up by 145% and 78% over Q1 2011 and Q1 2012 respectively.

Price Dynamics

Influenced by the financial crisis in 2008, the overseas demand for glyphosate maintained sluggish for a certain period. In addition, China’s glyphosate industry encountered overcapacity resulted from blind expansion. Under this circumstance, China’s glyphosate market entered a gloomy period from 2009–2011. During these three years, the glyphosate price was generally in a rather low level. Some middle-to-small scale glyphosate manufacturers were weeded out of the market. China’s capacity of glyphosate also dropped to about 650,000 tonnes.   

The demand for glyphosate has witnessed an uptrend since the second half year of 2012. The glyphosate price also began to increase in the second half year of 2012. At present, the glyphosate products price remains at a high level.

Company Dynamics

Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan), Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca) and Anhui Huaxing Chemical Industry Co., Ltd. (Anhui Huaxing) all achieved great operating performance in 2012, thanks to the thriving market and rising profitability of glyphosate. With the enhancing profitability of glyphosate and PMIDA business in Q1 2013, the three companies all turned loss into gain in Q1 2013.

The registration for the webinar is available now. For more information, please visit: http://www.cnchemicals.com/Event/EventDetailWebinar_44.html

The export volume of China's glyphosate products in 2012

Contributed by the high export growth of glyphosate technical and formulations, China's export volume of glyphosate A.I. in 2012 witnessed a big increase, up by about 26% over 2011.

Export volume

According to CCM's statistics, China has exported about 387,283 tonnes of glyphosate A.I. (as per 100% glyphosate acid) in 2012, including 245,876 tonnes of glyphosate acid technical, 336,008 tonnes of glyphosate formulations and 40,000 tonnes of glyphosate PMIDA (FIGURE 9).

In comparison, the export volume of glyphosate A.I. in 2012 increased by 26% over 2011, mainly attributed to the high export growth of glyphosate technical and glyphosate formulations. The export volume of glyphosate technical and glyphosate formulations in 2012 enjoyed a high growth rate of 29% and 24% respectively over 2011, whereas the export volume of PMIDA remained stable over 2011. In detail, the export volume growth of glyphosate 75.7% WSG experienced the highest figure in 2012, up by 184% over 2011. However, glyphosate 41% IPA still enjoyed the largest export volume in glyphosate formulations, accounting for about 66% of the total in 2012.

The export growth of glyphosate A.I. in 2012 reflected a rebound in overseas demand for glyphosate due to the rising adoption of glyphosate-resistant GM crops. Furthermore, the improved quality of Chinese glyphosate formulations has raised the acceptance of Chinese glyphosate formulations in overseas market.

AgriChina Investor is a monthly publication released by CCM’s. It is covering sections of investment environment, investment dynamics, market watch, industry discovery, expert view and market review etc. AgriChina Investor will focus on the economic situation, governmental policy, financial capital flow, key players' dynamics, big events and hot issues etc. in agriculture industry. Providing the most comprehensive information about the capital investment dynamics and market dynamics, this newsletter can make you clear about the investment environments in China's agriculture industry.

About CCM
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Listed glyphosate companies' net profit to surge in 2012

With the great improvement in China's glyphosate market and glyphosate business profitability in 2012, China's three listed glyphosate companies, namely Zhejiang Wynca Chemical Industry Group Co., Ltd. (Zhejiang Wynca), Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. (Nantong Jiangshan) and Anhui Huaxing Chemical Industry Co., Ltd. (Anhui Huaxing), all witnessed unexpected good performance in the whole year of 2012, and their net profit growth rate all exceeded 500% in 2012 compared with 2011 (TABLE 7), especially Anhui Huaxing's net profit growth rate, according to Glyphsoate China Monthly Report 1302 issued by CCM I in February.

The net profit growth rate of Anhui Huaxing seems the highest one among these three listed companies, but in fact it's the lowest one.

 

Anhui Huaxing's expected net profit in 2012 is about USD17.65 million-USD17.96 million (RMB109.99 million-RMB111.92 million), but thereinto about USD16.87 million (RMB105.13 million) is the total return from the 100% equity transfer of Anhui Huaxing's wholly-owned subsidiary—Anhui Huaxing Construction Investment Co., Ltd. (Anhui Huaxing Construction). 

 

If the total return from the 100% equity transfer of Anhui Huaxing Construction is excluded, the actual expected net profit of Anhui Huaxing is about less than USD1.61 million (RMB10 million) in 2012, and it's actual expected net profit growth rate is less than 159%. Besides, Zhejiang Wynca and Nantong Jiangshan both failed to transfer their subsidiaries and didn't obtain any return. Therefore, the net profit growth rate of Anhui Huaxing is the lowest one among these three companies.

High profitability in glyphosate business in 2012 contributes to high expected net profit in the three companies.

 

On one hand, the ex-works price of glyphosate related products increased greatly in 2012 over 2011. Specifically, the average ex-works price of glyphosate technical and PMIDA was about USD4,630/t and USD2,449/t in 2012, up by about 25.21% and 12.4% respectively over 2011. The average ex-works price of glyphosate formulations rose a lot in 2012, especially glyphosate 41% IPA and glyphosate 62% IPA. In detail, the average ex-works price of glyphosate 41% IPA, glyphosate 62% IPA, glyphosate 50% SP and glyphosate 75.7% WSG in 2012 was about USD2,167/t, USD2,749/t, USD2,585/t, and USD4,030/t, up by 11.84%, 15.35%, 7.78% and 5.42% respectively over 2011 (FIGURE 3).

 

On the other hand, the export value of glyphosate produced by these three companies increased greatly in 2012 over 2011. In detail, the export value of glyphosate produced by Anhui Huaxing, Nantong Jiangshan and Zhejiang Wynca was about USD20.65 million, USD282.23 million and USD399.77 million in 2012, up by about 14%, 59% and 23% respectively over 2011 (FIGURE 4).

In fact, these high expected net profit growth rate figures in 2012 represent the highest ones in these three listed glyphosate companies since their listing. These figures not only indicate bad operating performances in these three companies in 2011, but also reflected their success to swiftly grasp the sales opportunity in the improved glyphosate market in 2012.

Table Contents of Glyphsoate China Monthly Report 1302:

Anhui Huaxing's non-public issuing stock plan is approved by China Securities Regulatory Commission

Nantong Jiangshan's stock price rises 111.79% in 2012

Monsanto achieves great operating performance in first quarter of fiscal year 2013

Listed glyphosate companies' net profit to surge in 2012

Industrial concentration of Chinese glyphosate keeps increasing in 2012

One glyphosate registration in Jan. 2013

Glyphosate prices drop slightly in Feb. 2013

Glyphosate technical export price decreases slightly in Dec. 2012

Overview of glyphosate export in 2012

Glyphosate China Monthly Report, a monthly publication issued by CCM on 20^th, will keep track of latest dynamics, hotspots and competitiveness analysis, and forecasts on market trends of China’s glyphosate industry.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals, CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Is It Possible to Transfer China’s Glyphosate Technical Capacity

Glyphosate is one of the most commonly used herbicides in the market today. As the largest production base of glyphosate, China experienced irrational expansion in 2007 and 2008, but the whole glyphosate industry has been undergoing depressed glyphosate market since late 2008.

Some people remark whether there is an industrial transfer globally, which could help release China's overcapacity and improvement of world's glyphosate price. CCM International has done research on the possibility of glyphosate technical's capacity transfer.

All findings are recorded in the report of Global Commercial Opportunities Derived from Glyphosate Industry. Some results are:

1) It is impossible (or little possibility) to launch new glyphosate technical production line by using original starting material DEA (or glycine, IDAN) in overseas countries in the future 5~10 years. In other words, it's inadvisable to invest such glyphosate technical production lines.

2) It is possible to launch glyphosate production line by using PMIDA as the starting raw material in the future 5~10 years, but the possibility is relatively low.

3) There is low possibility of China's industrial transfer from Southeast China to Western China.

This report also focuses on the following aspects:
  -Analysis of supply and demand of glyphosate technical, 2006-2020;
  -Introduction and comparison of different production routes of glyphosate;
  -Projection of glyphosate supply by route, 2011-2020;
  -Projection of possible transfer of glyphosate production in the world in the future;
  -Introduction of supply & demand and consumption of glycine, IDAN, DEA, ethylene oxide, paraformaldehyde, yellow phosphorus, phosphorus trichloride, dimethyl phosphite, chlor-alkali, and methanol, 2006/2008-2010, 2011-2020;
  -Analysis of upstream opportunities derived from global glyphosate development.

If you are interested in this report, please feel free to contact us at econtact@cnchemicals.com.

(Guangzhou China, October 26, 2011)

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_r_779.html