Showing posts with label overcapacity. Show all posts
Showing posts with label overcapacity. Show all posts

Friday, December 19, 2014

China’s high-quality phosphorus ore outflows to overseas seriously



In recent years, the international phosphate fertilizer giants taking the Mosaic Company as representative, have accelerated their investment in Morocco, Tunisia, Jordan, Saudi Arabia and other countries with abundant phosphorus ore, obviously intending to raise their influences in the global market through controlling the phosphorus ore as the starting point. However, in contrast to the trend mentioned above, Chinese enterprises still export their phosphate fertilizers made from the high-quality phosphorus ore overseas on the basis of China’s large proportion of medium- and low-grade phosphorus ore and the low utilization rate, which indirectly accelerating the loss of China’s high-quality phosphorus ore.   
According to the statistics from the United States Geological Survey (USGS), the global economic reserves and basic reserves of phosphate rocks (phosphorus ore is the general term for the available phosphate minerals in economy) are 18 billion tonnes and 50 billion tonnes respectively (economic reserves refer to the phosphorus ore with mining cost less than USD35/t and basic reserves refer to those with mining cost less than USD100/t). In fact, over 80% phosphate rocks are clustered in Morocco, the US, South Africa, Jordan and China. Of this, China’s phosphorus ore reserves and basic reserves are 4.1 billion tonnes and 10 billion tonnes, accounting for 27.14% and 21.28% of the global volume respectively. However, there are few high-grade phosphorus ore but rich low-grade phosphorus ore in China and the average grade only reaches 17% phosphorus pentoxide ( P2O5). The high-grade phosphorus ore with over 30% P2O5 only accounts for 8.5% of the total. What's worse, over 90% of medium- and low-grade phosphorus ore cannot be used directly. In view of the analysis conducted by related experts, the current Chinese phosphorus ore may run out within about 20 years.
Phosphorus ore are mainly used in producing phosphate fertilizers and phosphoric acid. With the increasing population worldwide, more and more phosphate fertilizers are in demand to guarantee the food supply. In 2012, the global consumption of phosphate fertilizer was 41.9 million tonnes and it is predicted that the figure will reach 45.3 million tonnes by 2016. According to the preliminary statistics summarized by the China Phosphate Fertilizer Industry Association, China totally output around 16.5 million tonnes of phosphate fertilizers in 2013, of which about 11.88 million tonnes were consumed in the planting industry. Additionally, about 80% phosphorus ore are adopted to manufacture phosphate fertilizers directly or indirectly in China. In recent years, exporting the high-quality phosphate fertilizer is the natural choice to solve China's overcapacity of phosphate fertilizers. It is disclosed that the average export volume of Chinese phosphate fertilizers is around 2.2 million tonnes and a great deal of high-grade phosphorus ore with low-content cadmium drain to the overseas markets. According to data from China Customs, in H1 2014, China exported 596,100 tonnes of monoammonium phosphate, up 201% year on year, 1.27 million tonnes of diammonium phosphate, up 146% year on year, and 493,900 tonnes of triple superphosphate, rising by 116% year on year.
Once China's high-grade phosphorus ore fail to meet the domestic needs of producing phosphate fertilizers, China has to import phosphorus ore or phosphate fertilizers from overseas. At that moment, China will suffer restrictions in the purchase volume and the price of phosphate fertilizers and most imported phosphorus ore or phosphate fertilizers are likely to contain much more cadmium than the Chinese phosphorus fertilizers does. In order to prevent such problems, the Chinese government and enterprises should exploit and utilize the precious phosphorus ore in a reasonable way from now on.
For the Chinese government, firstly, it should improve the access threshold for phosphorus ore exploitation and advance the large-scale and intensive development and utilization of phosphorus ore. Furthermore, it can carry out rational plans, regulate related measures to protect phosphorus ore and control and eliminate unqualified enterprises. Secondly, the Chinese government should intensify the resource exploration and excavate new phosphorus ore resources. The Ministry of Land and Resources of People's Republic of China and related departments should strengthen the exploration capacity for mines, especially for the surroundings and the deep of key mines with favorable phosphoric mineralization to excavate more high-grade phosphorus ore. Thirdly, the Chinese government should intensify supports to the comprehensive utilization technologies of phosphorus ore. China should input more spending to the new technologies, contributing to the energy conservation, emission reduction and consumption reduction in the phosphorus chemical industry so as to improve the level of comprehensively utilizing Chinese phosphorus ore. These new technologies include the technology of producing high-concentrated phosphate compound fertilizers directly based on the medium- and low-grade phosphorus ore and the technology of fully using sulfur and associated resources based on the chemical-process phosphogysum. Fourthly, the Chinese government should encourage enterprises to invest overseas so as to achieve more phosphorus ore with low prices. Through implementing related policies, the Chinese government can encourage large enterprises to take measures such as making investments, jointing capital and merger to establish their own phosphorus ore businesses overseas and participate in the phosphorus chemical asset integration with Morocco, Saudi Arabia and other countries in North Africa and the Middle East in order to collect more cheap phosphorus ore.  
For enterprises, Chinese phosphorus ore enterprises and phosphate fertilizer enterprises should rationally utilize their resources and appropriately export their products abroad. Besides, they should enhance the recovery of phosphorus ore mining and ore dressing, rationally exploit and fully utilize China's limited phosphorus with low-content cadmium and consider to export appropriate volume of phosphate fertilizers under the precondition of ensuring the sustainable supply in the domestic market.  


-          This article was provided by CCM, a leading provider of data and business intelligence on China’s chemicals market. For more information on CCM and China Li-ion Battery E-News, please visit www.cnchemicals.com or contact econtact@cnchemicals.com

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Friday, August 23, 2013

Dragged by lower TiO2 prices in Q2, DuPont plans to strip out its TiO2 business


Lower TiO2 prices which declined by nearly 25% from the average in H1 2012, crimped DuPont's Q2 financial results. The operating earnings from DuPont's Performance Chemicals segment (including TiO2 products and fluoroproducts) declined by 55.56% from USD594 million in Q2 2012 to USD264 million in Q2 2013. As TiO2 prices declined and downstream end users' inventory level turned to be normal, DuPont's TiO2 sales volume in Q2 increased by 12% compared with that in Q2 2012 and 18% compared with that in Q1 2013.

Meanwhile, DuPont expressed primary decision to strip out its Performance Chemicals segment. The decision is based on the fact that the business has higher volatility, cyclicality and lower-growth profile, which bring fluctuation to the company's portfolio, despite the attractive financial strength and cash-generating capability of the business. DuPont explained that it has limited ability to create new growth opportunities with the segment by integrating its science across their markets, customers and products. 

DuPont has not reached a final decision yet, but it claimed it won't prolong the process.

A lower-growth expectation may be the primary reason for DuPont's decision to strip out its TiO2 business.

First of all, there will be limited demand growth in the future. As known, TiO2 consumption depends on the demand from the downstream, including coatings, plastics and decor paper. China, the second largest economy in the world, consumes about one third of the global TiO2 production. After thirty years of double-digit growth, China's economy faces the risk of lower growth and urgently needs to adjust its industrial structure. The Chinese government's efforts to turn the economy into one led by domestic consumption and reduce its reliance on fixed assets investment and exports will limit its demand for coatings, plastics and decor paper accordingly.

Secondly, its TiO2 business is confronted with an overcapacity and intense competition. DuPont's TiO2 business faces tough competition, especially from China. According to CCM's monitoring data, China's TiO2 capacity was about 2.78 million t/a in 2012, with an output of around 1.90 million tonnes, indicating an overcapacity and it is expected to reach about 3.40 million t/a in 2015, including 300,000t/a of chloride process TiO2. Although China-made TiO2 products are inferior to DuPont's, the price war started by Chinese TiO2 producers would erode DuPont's profits in TiO2 business because cheaper prices would attract rivals' customers.

Thirdly, uncommon and favorable factors will hardly happen again. The booming TiO2 market that brought enviable profits to producers during 2011-H1 2012 was caused by many outer uncommon factors. For instance, the permanently close-up of some European and American TiO2 factories around 2009 because of environmental protection and losses led to a rip of global TiO2 supply volume. For another, the USD647.25 billion (RMB4 trillion) stimulus plan launched by the Chinese government in late 2008 largely stimulated the country's consumption of coatings, plastics and decor paper in 2011. These favorable factors would seldom emerge in the future, indicating a small opportunity for the reappearance of a flourishing global TiO2 market.

Actually, before DuPont's decision to strip out its TiO2 business, another international TiO2 giant–Rockwood Holdings Inc. (Rockwood), with a TiO2 capacity of 340,000t/a, ever searched for investors to take over its TiO2 business. The divesture plan of Rockwood did not progress smoothly under the current weak market condition. It added a special adhesive business into the selling batch to attract investors upon the failure to sell its TiO2 business solely. It's reported that another major international TiO2 player–Huntsman, intended to take over Rockwood's TiO2 assets, which will probably increase the concentration of the global TiO2 industry. If DuPont sold its TiO2 assets to other giants in the industry, such as Huntsman, Tronox and Kronos, it will accelerate the integration of the global TiO2 industry.

Nevertheless, DuPont is not pessimistic about the TiO2 market in Q3 2013. It said that the TiO2 industry's value chain inventory level is near normal and its TiO2 sales volume is expected to see a double-digit growth in Q3 thanks to the possibly modestly higher demand for TiO2. In addition, the price increase of DuPont's TiO2 products movement effective since July 1 will also help the company perform better in next half year. Finally, DuPont reaffirmed a full-year outlook of earnings of about USD3.85 per share in 2013.

Editor's notes
Headlines of this issue
Industrial Information
Import volume of TiO2 saw massive decline while export volume declined slightly in June 2013
Total titanium feedstock supply volume continues slide in June compared with that in May
Domestic TiO2 price edged down slightly from mid-July to mid-Aug.
Company dynamics
Dragged by lower TiO2 prices in Q2, DuPont plans to strip out its TiO2 business
GPRO Titanium succeeds in backdoor listing and starts trading since July 26, 2013
Tronox's adjusted loss decreased and gross margin improved in Q2 2013
Pangang Group delivered bad operating performance in H1 2013 and accounts receivable soared
Upstream
Iluka's rutile production witnessed a YoY decline of 49.06% in H1 2013 due to the subdued global demand
Downstream
Kingfa sold 519,400 tonnes of modified plastics in H1 2013 with a YoY growth of 17.46%
Shandong Qifeng maintained strong growth in H1 2013 as benefited from the falling TiO2 price
AkzoNobel saw smaller decline in revenue in Q2 2013
Titanium Dioxide China Monthly Report, issued by CCM on 25th, is mainly comprised of five columns of news and reports related to TiO2 market, including “Supply & Demand”, “Company Dynamics”, “Upstream”, “Downstream” and “Price Update”. You can find out more business opportunities through the latest and helpful information provided in the report.

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.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China
Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Friday, August 16, 2013

What is the latest situation of China’s phosphorus industry in the face of severe overcapacity and sluggish demand?

China’s phosphorus industry has been immersed in a mire of industry-wide overcapacity and weak downstream demand. Under the circumstances, what is the latest situation of China’s phosphorus industry? Particularly, what are the price trends of phosphorus chemicals and dynamics of phosphorus related companies in China during 2012–2013? And what policies will the Chinese government implement to help phosphorus manufacturers improve their competitiveness and overcome the difficulties resulted from overcapacity. Focusing on these hotspots, CCM is going to hold a webinar on 29th August 2013 to share the following information with participants:

Price monitoring of some phosphate chemicals
l  Price monitoring of phosphate ore during Jan.2012 –July 2013
l  Ex-works price of yellow phosphorus in four major domestic production provinces (Yunan, Guizhou, Sichuan, and Hubei) during Jan.2013–July 2013
l  Ex-works price of phosphoric acid in four major domestic production provinces (Yunnan, Guizhou, Sichuan, and Hubei) during Jan.2013–July 2013
l  Ex-works price of sodium tripolyphosphate in four major domestic production provinces (Yunnan, Guizhou, Sichuan, and Hubei) during Jan.2013–July 2013

Export and company dynamics of some phosphate chemicals
l  Phosphate ore
l  Yellow phosphorus
l  Phosphoric acid
l  Phosphate fertilizers (MAP, DAP, TSP)
l  Phosphorus concentrates chemicals

Policies
l  Polices on phosphate ore in China
l  Policies on yellow phosphorus in China
l  Policies issued by China’s Phosphorus Industry Association

Registration of the webinar is available now. For more information, please visit http://www.cnchemicals.com/Event/Event.html

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.
Contacts:
Tel: 86-20-37616606

Thursday, May 10, 2012

Domestic Tomato Processing Industry Sees Overcapacity

China, a world's leading tomato paste producer, apart from the U.S. and Italy, witnessed continuous gloom of tomato processing industry in 2011, mainly caused by domestic overcapacity and slack sales in overseas market. The sluggish tomato processing industry would probably reduce the operating rate of tomato processing enterprises and lower farmers' enthusiasm for planting processing tomato in 2012, according to CCM International’s April Issue of Seed China News.

For tomato processing enterprises, 2011 was a tough year, with operating results inferior to previous years.

For example, Xinjiang Chalkis Co., Ltd. (Chalkis), a listed company specialized in tomato paste producing and marketing, predicted on 31 Jan. 2011 that it would have an unbelievably poor performance in 2011, with net loss hitting USD136.25 million (RMB880 million). Chalkis mainly contributes its heavy loss to the depressed export price of tomato paste and the soaring production cost.

COFCO Tunhe Co., Ltd. (COFCO Tunhe), the largest tomato processor in China, also suffered unsatisfactory performance in tomato processing business, with the operating profit margin decreasing from 20.31% in 2010 to 14.55% in 2011. The company blames its decreased profit in tomato paste to continuous price downturn, increasing cost and sluggish overseas market. In 2011, COFCO Tunhe totally achieved net profit of USD5.01 million (RMB32.38 million), thanks to considerable government subsidies and investment returns.

Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang), a dominant seed company, also witnessed deficit in tomato paste business in 2011. Revealed by Gansu Dunhuang, its subsidiary engaged in tomato paste processing presents a net loss of USD1.28 million (RMB8.27 million) in 2011, heavier over the previous year, mainly owing to domestic overcapacity and decreased export.

Leading tomato processors were so depressed in 2011, not to mention small and medium ones which generally suffered serious deficits in 2011, even facing business failures.

According to industry insiders, tomato processing companies have made rapid capacity expansion during the past few years, causing the current overcapacity and intense competition. Since most tomato paste produced by domestic companies is sold abroad, the sluggish tomato paste market in Europe and the U.S. has made their performance even worse in 2011. Moreover, the depressed price and the soaring cost have posed greater challenges to domestic tomato processors.

In view of the slack sales and oversupply, tomato processing companies would significantly cut their production capacity in 2012. It is expected that most tomato paste manufacturers would have to deal with large stocks to return funds.

It is released that at present COFCO Tunhe Co., Ltd. (COFCO Tunhe) whose capacity of tomato paste is over 350,000t/a, still has a large number of stocks of tomato paste, with constant downturn in export. Actually, COFCO Tunhe has planned to put more efforts to enhance its sugar processing business in future.

As for Gansu Dunhuang Seed Co., Ltd. (Gansu Dunhuang), it has already transferred most of the investment originally in tomato processing project into corn seed business at the end of 2011.strong resistance and high quality will be continuously promoted for the protection of food security in China.

The gloomy tomato processing industry would seriously affect farmers' enthusiasm for planting processing tomato. It can be predicted that the planting area of processing tomato in 2012 would keep declining, following the significant decrease in 2011.

In China, processing tomato planting is mainly concentrated in Xinjiang, Gansu and Inner Mongolia. Xinjiang, as the largest production base of processing tomato at home, owns planting area of processing tomato of around 64,000 ha. In 2011, the output of processing tomato reached 4.35 million tonnes in Xinjiang, accounting for 15% of the world's total yield. With more than 110 tomato processing companies, Xinjiang annually exports over 700,000 tonnes of tomato paste to over 100 countries and regions in the world.

Source: Seed China News 1204
http://www.cnchemicals.com/Newsletter/NewsletterDetail_28.html

Content of Seed China News 1204:
Winall Hi-tech vigorously expands business 2011
Shandong Denghai: both revenue and net profit increase in 2011
Hefei Fengle's net profit down 39.21% in 2011
WanXiang Doneed: sharp growth in net profit 2011
Domestic tomato processing industry sees overcapacity
Corn single-grain sowing technology promoted rapidly in Huang-Huai-Hai Plain
Longping High-tech suspends listing for asset restructuring
Grand Agriseeds to control a large rice seed company
Vegetable seed technological innovation incubator opened in Shouguang, Shandong
Domestic scientists successfully transplant oil palm plantlet

Seed China News, a monthly publication issued by CCM International on 30th of every month, offers timely update and close follow-up of China’s seed industry dynamics, analyzes market data and finds out factors influencing market development


About CCM International
CCM International 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 International 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

Friday, February 17, 2012

CCM International’s Free TiO2 Webinar to be Open in Feb. 23

CCM International will hold a free TiO2 webinar at 16:30 pm (GMT+8, Beijing Time) on Feb. 23, 2012, with fresh idea and brand-new communication way. Entitled “China TIO2 Market Review and 2012 Forecast”, the upcoming webinar has drawn many people’s attentions in the whole Chinese TiO2 market. Statistics from CCM International’s website (www.cnchemicals.com) show that about 20 people from famous companies around the world have registered to attend the webinar, which will last about 30 minutes.

China has become the largest TiO2 country of production and consumption in the world since 2009. TiO2 price has been surging in 2011, especially from August 2011, the price of titanium dioxide has been remained at high level. According to the latest investigation from CCM International, domestic TiO2 market is facing severe overcapacity problem. There are hidden crises in this “promising” industry. With the purpose of helping TiO2 players to avoid risks and crises, this TiO2 webinar is committed to providing TiO2 enterprises with feasible ideas and solutions.

It is reported that about 20 delegates from TiO2 giant companies around the world will participate in this webinar. Presented by CCM International’s Chief Editor of Titanium Dioxide China Monthly Report, the webinar will share you with a comprehensive review of China’s TiO2 market in 2011 and the latest price trend, as well as the import & export situation of titanium dioxide in 2011. Most importantly, the future development trend of TiO2 in 2012 will be delivered by then.


Specific Outline of TiO2 Webinar:
-Review of the China TIO2 market
-Big events of China TIO2 in 2011
-China TIO2 recent prices analysis
-China TIO2 import and export situation in 2011
-Forecast the China TIO2 trend in 2012


About CCM International
CCM International 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 International 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

Friday, January 6, 2012

Domestic Pesticide Market Remains Depressed

Statistics from National Bureau shows that China's pesticide output reached 1.92 million tonnes in Q1-Q3 2011, up 15.7% compared with that at the same period last year. Pesticide output in the whole year of 2011 is predicted to reach about 2.5 million tonnes. Although the amount of pesticide output and sales volume in 2011 is predicted to increase to a certain extent, domestic pesticide industry still seems to be trapped in downturn.

According to the 2011 Q3 financial reports of all the listed pesticide companies in China, net profit of Q1-Q3 in 2011 only reached USD100.66 million, down 32.28% compared with that at the same period last year.

Overcapacity is still considered to be the main reason for the depressed domestic pesticide market. At the beginning of 2011, although insiders have ever predicted that domestic pesticide industry may recover in 2011 due to the prediction of price increase of raw materials, the intense competition and lagging price increase of pesticides have made the industry remain in downturn.

Cracking down and standardizing the chaotic pesticide industry, creating orderly production, investing more in new pesticide R&D, etc. are considered to be good ways to ease the downturn in domestic pesticide industry. Unfortunately, things can’t be changed easily. The severe overcapacity problem in China might still hinder the development of domestic pesticide industry in the next few years.

All findings are from CCM International’s Crop Protection China News. If you are interested in this newsletter, please feel free to contact us.

Specific Headline News of Crop Protection China News 1123:
-According to the performance of domestic listed pesticide enterprises in Q1-Q3 2011, the recovery of domestic pesticide industry has not been realized yet. Overcapacity is still the main reason to drag domestic pesticide industry in downturn.
-Some large agrochemical companies in China have encountered troubles in their business due to the implementation of chain store operation mode, which may be the common difficulties for most of them in China.
-An international press conference, held by Bayer AG in Shanghai on 16 Nov., 2011, declared its expansion plans in Asia in the next four years.
-As more pesticide enterprises in China started to register for nitenpyram formulation and technical production, nitenpyram market is predicted to have an upward trend in the coming years.
-High price of toosedarin insecticides impedes its large promotion in China.
-Registration of the first coumoxystrobin mixed formulation, namely coumoxystrobin·tebuconazole 40% SC, will be approved by the Ministry of Agriculture in 2012.
-CMST released the 12th Five-Year Plan of Biotechnology Development (2011-2015) on 28 Nov., 2011 aiming to better support the development of biotechnology.
-46.7 million ha. arable land in  suitable region in China would be subsoiled again till 2015, trying to enter farming cycle "subsoil the same land once every three years".
-There are some emerging corn pests and diseases beginning to spread in 2011, while proxenus lepigone among them broken out is not an original corn pest.


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

Monday, December 26, 2011

Domestic Pesticide Industry Continues Downturn

According to the data from National Bureau of Statistics, China's pesticide output reached 1.92 million tonnes in Q1-Q3 2011, up 15.7% compared with that at the same period last year. Pesticide output in the whole year of 2011 is predicted to reach about 2.5 million tonnes and domestic demand may reach 308,000 tonnes, based on CCM’s latest issue of Crop Protection China News.

Although the amount of pesticide output and sales volume in 2011 is predicted to increase to a certain extent, domestic pesticide industry still seems to be trapped in downturn.

According to the 2011 Q3 financial reports of all the listed pesticide companies in China, including 20 listed companies that mainly engaged in pesticide production and sales, total revenue of these companies reached USD4.07 billion in Q1-Q3 2011, up 24.07% compared with that at the same period last year. However, the net profit in this period on the other side witnessed slide, reaching USD100.66 million, down 32.28% over Q1-Q3 2010.

Overcapacity is still considered to be the main reason for the downturn of domestic pesticide industry. At the beginning of 2011, although insiders have ever predicted that domestic pesticide industry may recover in 2011 due to the prediction of price increase of raw materials, the intense competition and lagging price increase of pesticides have made the industry remain in downturn.

Domestic pesticide output gradually has surged in recent years, but the domestic demand accounts for merely 1/8 of the total output. As an export-oriented country in pesticide industry, China has a large amount of pesticides exported to oversea market every year. In Q1-Q3 2011, China has accumulatively exported 594,200 tonnes of pesticides, consisting of 158,100 tonnes of insecticides, 377,200 tonnes of fungicides and 58,900 tonnes of herbicides.

Adding up the pesticide amount consumed by domestic market and the export volume, a large amount of pesticides remain in dull sale condition. Aiming to maximize interests and further seize the market share, most of domestic pesticide companies still have the competitive ability to expand the capacity of their products. So far, some pesticides, such as glyphosate, imidacloprid, abamectin and acetochlor, have suffered from serious overcapacity in China.

Glyphosate, an effective herbicide but with tragic destiny in China, is always mentioned when talking about pesticide overcapacity in China. Domestic glyphosate capacity reaches over 720,000t/a in 2011, but the output is predicted to be 300,000 tonnes to 350,000 tonnes. With dim consumption capability in oversea market and low consumption amount in domestic market, downturn of domestic glyphosate industry continues in 2011. Performance of some main glyphosate manufacturers in China mirrored the downturn in Q1-Q3 2011, such as Nantong Jiangshan Agrochemical & Chemicals Co., Ltd. and Anhui Huaxing Chemical Industry Co., Ltd.

Acetochlor, a herbicide used in large dry farmland, also faces overcapacity this year. Its total capacity reaches 140,000t/a in 2011, but only 10,000 tonnes and 20,000 tonnes are consumed in domestic market and oversea market respectively.

Business of products like imidacloprid and abamectin are even more difficult in China in 2011. Serious product homogenization, overcapacity and impact from foreign products such as chlorantraniliprole have made enterprises face even larger pressure.

At present, pesticide export is still considered to be an efficient way to ease the overcapacity pressure in China. However, fundamental problems can't be solved by only depending on pesticide export. As more and more high-level pesticides with low toxicity and residue, and improved pesticide effect developed by foreign pesticide giants, the pesticide demand in oversea market will indirectly decrease. Cracking down and standardizing the chaotic pesticide industry, leading to orderly production, more investment in new pesticide R&D, etc. are considered to be good ways to ease the downturn in domestic pesticide industry. Unfortunately, it is more easier said than done, and serious overcapacity in China may still continue in the next few years.


Content of Crop Protection China News 1123:
Domestic pesticide industry continues downturn
Chain operation mode in agrochemical field faces challenge in China
Bayer CropScience to expand in China
China's nitenpyram market predicted to have an upward trend
High price impedes promotion of toosedarin insecticides
Registration of coumoxystrobin·tebuconazole 40% SC to be approved in 2012
Policy to further support bio-pesticide
China plans to subsoil 46.7 million ha. arable land again in suitable region till 2015
New corn diseases and insect pests increase in 2011

Crop Protection China News, a semimonthly publication issued by CCM International on 15th and 30th(31st) of every month, aims to gain a deep insight into Chinese market, supply the latest market data and strategy support, analyze the newest legislation and policy and grasp the future market trend.

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