Glycine Route Glyphosate Shows Competitiveness in China

With the increasing overseas orders and growing price in Q1 2012, some glyphosate technical manufacturers adopt glycine route resume expansion program, which has shown the remained competitiveness of glycine route in China, according to CCM International’s May Issue of Glyphsoate China Monthly Report.

It's confirmed by CCM International that two glyphosate technical manufacturers, Sichuan Fuhua Tongda Agro-chemical Technology Co., Ltd. (Sichuan Fuhua) and Hubei Taisheng Chemical Co., Ltd. (Hubei Taisheng), are expanding glyphosate technical production lines with capacity of 50,000t/a respectively (please refers to relative stories in this issue).

 

The running production lines and expansion projects in the two companies all adopt glycine route. After the launch of the two expansion projects by the end of this year or next year, the proportion of glycine route in China will increase to 64.3% from 59.6% currently. And the top three glyphosate manufacturers—Sichuan Fuhua, Hubei Taisheng and Zhejiang Wynca all adopt glycine route then.

 

Both of the two companies claimed that the expansion is on the basis of the original plan and the future prospect. China had undergone a period of crazy glyphosate expansion in 2008, which results in the serious overcapacity and long-term gloomy glyphosate market, and many companies canceled or suspended new glyphosate plan. In late 2011 and Q1 2012, overseas orders increased and glyphosate price rose, and there is profit margin in glyphosate production.

Competitiveness of the three routes are determined by the technology maturity level, manufacturing cost and raw material accessibility. Since all the three routes are mature, competitiveness is mainly determined by comprehensive manufacturing cost.

 

Glycine route, the firstly commercialized and most popular one, has the dominance in the short-term future because of its comprehensive cost advantages resulted from the less sensitivity to petroleum price and recycled by-product monochloromethane.

 

It's a general rule that manufacturers with integrated downstream and upstream industries has cost advantage, and glyphosate technical production adopting glycine route is capable of integrating glyphosate industrial chain because of lower investment and technical thresholds.

 

Both Sichuan Fuhua and Hubei Taisheng have built a comprehensive industrial chain centered in glyphosate production, such as DMP production lines, glycine production lines and monochloromethane recycle.

 

"By utilizing natural resource and taking advantages of raw material supply, coupled with by-product utilization, Sichuan Fuhua could achieve 5-10% profit margin in glyphosate business at present, while many other glyphosate producers are surviving on the edge of profit loss." Mr. He, Sales Manager from Sichuan Fuhua said.

Source: Glyphsoate China Monthly Report 1205

http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html

Content of Glyphsoate China Monthly Report 1205:

Zhejiang Wynca achieves lowest net profit since its listing in 2001

Sichuan Fuhua to expand 50,000t/a glyphosate capacity by Sept. 2012

Zhejiang Jinfanda to hold 132,000t/a glyphosate capacity by 2013

Three listed glyphosate companies' foreign operating revenue increased in 2011

Glyphosate hard to occupy the market share left by paraquat AS

Glycine route glyphosate shows competitiveness in China

Patent applications show nutrient-containing glyphosate products a new trend

Glyphosate price stays stagnant in May 2012

Glyphosate formulation export sets a new record in March 2012

Analysis of glyphosate export in Q1 2012

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20^th of every month, 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.

CCM International Ltd.
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

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1076.html

Decreasing Monochloromethane Price Compresses Glyphosate Profit

It's often said by professionals that glyphosate technical production adopting glycine route has the strongest competitiveness among the three routes (glycine, DEA, IDAN) because of its cost advantage, attributed to the recovery of monochloromethane, the by-product. However, the decreasing price of monochloromethane has compressed the profit margin of glyphosate technical adopting glycine route, according to CCM International’s April Issue of Glyphsoate China Monthly Report.

In April 2012, the ex-works price of monochloromethane has descended to USD350/t (RMB2,200/t), down 18.5% over March 2012. Compared with that in Oct. 2011, monochloromethane price in April 2012 decreased by 46.3%. In fact, monochloromethane price has witnessed a sharp decline in the past half year (from Q3 2011 to Q1 2012). The average ex-works price of monochloromethane in the first three quarters of 2011 is over USD800/t (RMB5,000/t).

"The stagnant demand in downstream industry has led to price downturn of monochloromethane in the past half year, and the sale of monochloromethane has become a problematic," a market insider said.

 

The main end use of monochloromethane is organic silicon. Now the low operating rate of organic silicon, resulting from the overcapacity and competition from overseas product, has led to the stagnant monochloromethane demand and then price downtrend.

 

The average recovery rate is about 500kg by-product monochloromethane when producing one tonne of glyphosate technical, and the recovery cost of monochloromethane is about USD80/t (RMB500/t). Thus, the gross profit from monochloromethane recovery and sales is about USD95/t (RMB600/t) from glyphosate technical production in April 2012, compared with more than USD160/t (RMB1,000/t) from that in H1 2011.

While other glyphosate technical manufacturers sell out monochloromethane, Zhejiang Wynca Chemicals Industry Group Co., Ltd. (Zhejiang Wynca) developed combined production technologies of glyphosate and organic silicon, and its monochloromethane is for private use. Coupled with the higher recovery rate, Zhejiang Wynca could gain more value in monochloromethane recovery. Some other glyphosate manufacturers, such as Sichuan Fuhua Tongda Agro-chemical Technology Co., Ltd., Hubei Xingfa Group (its subsidiary Hubei Taisheng Chemical are operating 40,000t/a glyphosate capacity) plans to develop downstream industry of monochloromethane.

Monochloromethane is mainly generated at hydrolysis process of glyphosate synthesis. The recovery process of monochloromethane includes four steps: water scrubbing, alkaline washing, drying and condensation.

Source: Glyphsoate China Monthly Report 1204

http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html

Content of Glyphsoate China Monthly Report 1204:

Anhui Huaxing saved from ST marking

Nantong Jiangshan:Technology improvement ensures sustainable development

Chaotic market of glyphosate 41% IPA

China bans mixed glyphosate formulation with glyphosate content lower than 30%

Treated mother liquid used to produce 30% glyphosate SL

Decreasing monochloromethane price compresses glyphosate profit

China's glyphosate demand to grow at CAGR of 9.5% in 2012-2016

Mixed formulation containing glyphosate salt and fomesafen salt

Glyphosate price slightly decreases in April 2012

Glyphosate export volume in Feb. 2012 increases by 3.1% MoM

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20^th of every month, 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.

CCM International Ltd.
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

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_1044.html

Glycine Route Has Cost Advantage in Glyphosate Technical Production

The August issue of Glyphsoate China Monthly Report was released by CCM recently, revealing that the recovery of by-product monochloromethane makes glycine route the best route to produce glyphosate.

The cost of glyphosate technical manufactured by glycine route is lower than that of DEA route and IDAN route, as glyphosate technical manufacturers adopting glycine route could be repaid from the recovered monochloromethane, according to CCM's investigation and estimation.

The average recovery rate is about 500kg by-product monochloromethane when producing one tonne of glyphosate technical, and the recovery cost is less than USD78 (RMB500) per tonne of monochloromethane. The market price of monochloromethane is about RMB3,900/t. It could be calculated that glyphosate manufacturers adopting glycine route can gain about USD178 (RMB1,500) from monochloromethane when producing one tonne of glyphosate technical, accounting for about 6% of glyphosate technical production cost. Thus, totally, glycine route glyphosate has about USD125/t (RMB800/t) cost advantage over IDAN or DEA route glyphosate. And that's one of the key reasons why more glycine route glyphosate technical manufacturers are operating.

Following highlights are covered in the August issue of Glyphsoate China Monthly Report

-Redsun Group's reorganization has no help to its glyphosate business.

-Anhui Huaxing falls into continuous loss in H1 2011, due to the depressed glyphosate market.

-Deadline of ChemChina's acquisition for MAI has been extended to 30 October 2011.

-Brazil ceases anti-dumping mid-term review investigation on Chinese glyphosate, but there are not many market responses.

-Monochloromethane recovery contributes to glycine route's cost advantage.

-Increased manpower cost aggravates vulnerable glyphosate industry.

-Expanding downstream products is the key solution to ease Chinese IDAN's severe surplus.

-Glyphosate price slightly increases in August 2011, but it remains undervalued.

-China experiences decrease in glyphosate A.I. export but enjoys increase in total export value in H1 2011.

-Glyphosate export volume keeps stable in June 2011.

(Guangzhou China, August 24, 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.
Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.com

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

Monochloromethane Recovery Contributes to Glycine Route's Cost Advantage

Though glycine route glyphosate has disadvantage in waste water treatment, the recovery of by-product monochloromethane makes this route have the strongest comprehensive competitiveness among the three routes at present, according to CCM’s August issue of Glyphsoate China Monthly Report.

Under the long-term depressed glyphosate market and undervalued price, more and more Chinese glyphosate manufacturers suspend glyphosate technical production or quit glyphosate business. In recent three months, only about 12 glyphosate technical manufacturers has been operating formally, and most of them are manufacturers  adopting glycine route.

According to CCM International's investigation and estimation, the cost of glyphosate technical manufactured by glycine route is lower than that of DEA route and IDAN route, as glyphosate technical manufacturers adopting glycine route could be repaid from the recovered monochloromethane.

The average recovery rate is about 500kg by-product monochloromethane when producing one tonne of glyphosate technical, and the recovery cost is less than USD78 (RMB500) per tonne of monochloromethane. The market price of monochloromethane is about RMB3,900/t. It could be calculated that glyphosate manufacturers adopting glycine route can gain about USD178 (RMB1,500) from monochloromethane when producing one tonne of glyphosate technical, accounting for about 6% of glyphosate technical production cost. Thus, totally, glycine route glyphosate has about USD125/t (RMB800/t) cost advantage over IDAN or DEA route glyphosate. And that's one of the key reasons why more glycine route glyphosate technical manufacturers are operating.

While other glyphosate technical manufacturers sell out monochloromethane, Zhejiang Wynca Chemicals Industry Group Co., Ltd. (Zhejiang Wynca) developed combined production technologies of glyphosate and organic silicon, and its monochloromethane is for private use. Coupled with the higher recovery rate, Zhejiang Wynca could gain more value in monochloromethane recovery. Some other glyphosate manufacturers such as Sichuan Fuhua Tongda Agro-chemical Technology Co., Ltd. are planning to develop downstream industry of monochloromethane.

(Guangzhou China, August 24, 2011)

Source: Glyphsoate China Monthly Report 1108

http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html

Content of Glyphsoate China Monthly Report 1108:

Redsun Group reorganization has no help to its glyphosate business

Anhui Huaxing falls into continuous loss in H1 2011

Brazil ceases antidumping mid-term review investigation on Chinese glyphosate

Deadline of ChemChina's acquisition for MAI extended again

Monochloromethane recovery contributes to glycine route's cost advantage

Increased manpower cost aggravates vulnerable glyphosate industry

Expanding downstream products is the key solution to IDAN’s market plight

Glyphosate price slightly increases in August 2011

Overview of glyphosate products export in H1 2011

Glyphosate export volume keeps stable in June 2011

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20^th of every month, 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.
Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.com

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

China’s Glyphosate Industry Deteriorates

Guangzhou China, July 29, 2011 - The July issue of Glyphsoate China Monthly Report reveals that RMB appreciation and the rising interest rate aggravate glyphosate industry in China.

Chinese glyphosate industry suffers a lot from the decreased USD exchange rate against RMB, also called  RMB appreciation.

On July 20, 2011, the central parity exchange rate between USD and RMB dropped to 6.4592, compared with that of 6.7812 in July 20, 2010. Providing glyphosate technical price is RMB22,000/t, and the difference of one tonne of glyphosate technical is USD161.73 (22,000/6.4592 - 22,000/6.7812) when computed by the exchange rate of 6.7812 and 6.4592.

Overseas buyers are unwilling to completely burden the Chinese glyphosate exporters' loss caused by RMB appreciation or USD depreciation, and thus the loss would only be shouldered by both exporters and importers or completely burdened by the domestic manufacturers.

What’s worse, on July 6, 2011, Chinese government raised the loan interest for the third time this year, which means the production cost of glyphosate will be increased.

Providing the investment in glycine route glyphosate with capacity of 10,000t/a is USD10 million (Investment in IDAN route will be higher), and the loan interest will increase by USD0.111 million (10, 000,000 * (7.05%.-5.94)). Calculated by the current operating rate of 30%, the increased cost of one tonne of glyphosate technical caused by the increased loan interest rate could reach USD37 (111,000/3,000).

The RMB appreciation and raised loan interest rate have posed much pressure to glyphosate industry, making glyphosate technical producers harder to survive.

You will find more news about the industrial trend, company dynamics, market price, and future forecast in the latest issue of Glyphsoate China Monthly Report.

The following highlights are covered in the latest issue of Glyphsoate China Monthly Report:

- Nantong Jiangshan preannounced its preliminarily estimated profit, reporting a profit loss of USD3.64 million (RMB23.5 million).-Zhejiang Wynca's endless technology innovation secures its leading position in glyphosate industry-Monsanto's Roundup incentive program is under investigation by the U.S. Security and Exchange Commission.-The deadline for ChemChina's acquisition to MAI has been extended to the end of September 2011.-APG is considered as a promising substitution of tallow amine adjuvant.-Chinese company recommends the joint application of glyphosate and paraquat-RMB appreciation and heightened interest rate aggravate glyphosate industry.
-Glycine destiny is tied up with glyphosate for its high dependence on glyphosate consumption.-Glyphosate price slightly decreases in July 2011 due to the slack season in overseas market.-Glyphosate export volume decreases in May 2011, reflecting the stagnant overseas market.

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.
Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.com

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

RMB Appreciation and Heightened Interest Rate Aggravate Glyphosate Industry

July 29, 2011, CCM - The vulnerable Chinese glyphosate industry has been suffering from the increasing cost in financing and the loss caused by the RMB appreciation, and many glyphosate producers are on the edge of survival, according to CCM’s July issue of Glyphsoate China Monthly Report.

On July 6, 2011, People's Bank of China announced the decision of implementing new interest rate from July 7, 2011, which is the third time for China to heighten interest rate this year. The purpose of the third consecutive raise in interest rate is to control inflation and soaring CPI.

According to the new interest rate, the loan interest rate of long-term loan (more than five years) reaches 7.05% annually, up 18.69% over the corresponding period last year (5.94%).

Obviously, the increased loan interest rate will heighten the cost of glyphosate. Providing the investment in 10,000t/a glycine route glyphosate is USD10 million (Investment in IDAN route will be higher), and the loan interest will increase by USD0.111 million (10, 000,000 * (7.05%.-5.94)). Calculated by the current operating rate of 30%, the increased cost of one tonne of glyphosate technical caused by the increased loan interest rate could reach USD37 (111,000/3,000).

The decreased USD exchange rate against RMB, or so-called RMB appreciation, has also exerted great pressure on Chinese glyphosate industry at present.

RMB exchange rate against USD had seen a sharp uptrend in the past one year. On July 20, 2011, the central parity exchange rate between USD and RMB dropped to 6.4592, compared with that of 6.7812 in July 20, 2010.

Providing glyphosate technical price is RMB22,000/t, and the difference of one tonne of glyphosate technical is USD161.73 (22,000/6.4592 - 22,000/6.7812) when computed by the exchange rate of 6.7812 and 6.4592.

Obviously, oversea buyers are unwilling to completely burden the Chinese glyphosate exporters' loss caused by RMB appreciation or USD depreciation, and thus the loss would only be shouldered by both exporters and importers or completely burdened by domestic manufacturers.
   
Therefore, compared with the corresponding period last year,

glyphosate technical manufacturers may shoulder increased cost of about USD162 and USD37 caused by RMB appreciation and raised loan interest rate respectively in selling one tonne of glyphosate technical.

Now the glyphosate price is undervalued; the RMB appreciation and raised loan interest rate have posed much pressure to glyphosate industry, let alone the increasing cost in raw material and manpower. As for the current glyphosate technical producers, any other raised cost may become the last straw that break the camel's back.

Source: Glyphsoate China Monthly Report July 2011

http://www.cnchemicals.com/Newsletter/NewsletterDetail_14.html

Content of Glyphsoate China Monthly Report July 2011:

Nantong Jiangshan suffers from profit loss in H1 2011
Zhejiang Wynca: Endless technology innovation secures its leading position in glyphosate industry
Monsanto's Roundup incentive program under investigation by SEC
ChemChina to complete its acquisition to MAI in September 2011
APG considered as promising substitution of tallow amine adjuvant
Joint application of glyphosate and paraquat
RMB appreciation and heightened interest rate aggravate glyphosate industry
Glycine destiny tied up with glyphosate
Glyphosate price slightly decreases in July 2011
Glyphosate export volume decreases in May 2011

Glyphosate China Monthly Report, a monthly publication issued by CCM International on 20^th of every month, 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.
Please visit http://www.cnchemicals.com for more information or contact econtact@cnchemicals.com

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