The 2-year
special troubleshooting campaign for "three phosphorus"- phosphorus ore,
phosphorus chemical, and phosphorus gypsum - in China eventually came to an end
in early September 2019. The large-scale inspection covers 7 Chinese provinces
and regions, such as Hubei, Sichuan, Guizhou, Yunnan, Hunan and Jiangsu
provinces, as well as Chongqing Municipality along the Yangtze River Economic
Zone.
Six glyphosate
enterprises are likely to be suspended for overhauls because of unqualified
glyphosate products, whose capacity reaches 310,000 tonnes, accounting for 43%
of the industry’s gross capacity in 2018. Currently, relevant solutions have
been put forward by the Chinese government. Companies that fail to meet
standards will be closed, renovated, or upgraded by the local governments. In
other words, these six glyphosate enterprises will face a suspension of
production. Among the top 6 glyphosate producers in China, only two A-share
listed companies have not been impacted. Market insiders predict that the
production capacity of glyphosate TC will be reduced to nearly 40% of the
market.
Two top Chinese glyphosate producers: Xingfa
and Xin’an have a narrow escape from suspension
The 2 A-share Chinese listed companies that
are not affected by the suspension of production include respectively Hubei
Xingfa Chemical Group Co., Ltd. (Xingfa Group) and Zhejiang Xin'an Chemical
Group Co., Ltd. (Xin’an Group). Xingfa Group stands in the first place in the
Chinese glyphosate industry, while Xin’an Group is ranked in the second.
Xingfa
Group owns a patent on its cleaning technology concerning the production of yellow
phosphorus and glyphosate. This technology is successfully exported to
developed countries and regions, such as Korea, Japan, and Singapore. Besides, Xingfa Group becomes the first
company that has conducted an R&D project on black glyphosate with Institutes
of Advanced Technology, Chinese Academy of Sciences. The achievement of this
research takes a leading position in China.
Xin’an
Group focuses on the crop protection industry and silicone materials industry.
The company’s main products consist of glyphosate TC, pesticides and
fungicides. Apart from that, the company has a complete industrial chain
concerning silicone, from which silicone rubber, silicone oil, silicone resin
and silane can be produced.
EPA stops approving warning labels for
glyphosate
According
to the U.S. Environmental Protection Agency (EPA), warning labels for the
suspected cancer-causing glyphosate will no longer be approved. In 2015, glyphosate was classified in Group
2A (probable carcinogens) by the International Agency for Research on Cancer
(IARC). However, EPA has recently drawn a conclusion that glyphosate would not
cause cancer, after a large-scale assessment of its safety since 2017.
The price of Chinese glyphosate is likely to soar
in the next quarter
It is
reported that glyphosate has the best export volume in China among all
pesticides. With the third quarter of 2019 coming to an end, the Chinese glyphosate
industry is entering into a peak period of exports. Some market insiders think
that an increase in prices of glyphosate will appear, together with high
volumes of transactions. Compared with the same period of last year, prices of glyphosate
tend to experience a sharp growth from late August to December.
For more
information about China’s glyphosate market, please have a look at our monthly
newsletter Glyphosate
China Monthly Report.