Top 10 events of Chinese herbicide industry in 2012

Publish time: 12th January, 2013      Source: CCM
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  CCM issued its latest edition of Herbicides China News 1301 on Jan.15. In this insightful report, an article with the title of “Top 10 events of Chinese herbicide industry in 2012” is highlighted.
  1. Glyphosate market turns warm
  In Q1 2012, the ex-factory price of glyphosate remained at a relatively low level mainly due to weak overseas demand. In Q2 2012, the average ex-factory price of glyphosate 95% technical increased slightly to about USD4,108/t from the average price of USD3,978/t in Q1 2012 mainly due to increasing overseas demand and the prices of main raw materials like glycine and IDAN. The ex-factory price of glyphosate began to surge from July 2012 as a result of promotion caused by hot money and producers' blind pricing strategy. The ex-factory price of glyphosate 95% technical broke through to USD4,890/t in late Aug. 2012, and it kept ascend during the remaining four months of 2012.  
  Thanks to the price increase of glyphosate, the whole stock price level of main listed glyphosate companies in China witnessed sharp growth, such as Jiangsu Yangnong Chemical Co., Ltd., Anhui Huaxing Chemical Industry Co., Ltd. (Anhui Huaxing), Nantong Jiangshan Agrochemical & Chemicals Co., Ltd., Zhejiang Wynca Chemical Industry Group Co., Ltd., etc. Moreover, these leading glyphosate companies in China achieved great operating performance in 2012. For instance, Anhui Huaxing, a top listed glyphosate manufacturer with current glyphosate and PMIDA capacities of 15,000t/a and 20,000t/a respectively in China, successfully turned loss into gain in Q3 2012. It achieved a total revenue of USD31.62 million (RMB197.37 million) in Q3 2012, with an operating profit of USD0.72 million (RMB4.52 million). 
  2. Paraquat SL to withdraw from Chinese market
  On 24 April, 2012, three Chinese governmental departments—the Ministry of Agriculture, Ministry of Industry and Information Technology and General Administration of Quality Supervision, Inspection and Quarantine, jointly released an official announcement. It announced that all paraquat SL should be withdrawn from the whole Chinese market from 1 July, 2016. The most important detailed measures are listed as follows: (1) From 24 April, 2012, China stopped approving new manufacturers of paraquat technical and formulation to set up, stopped accepting new applications for field experiments, registration and production permits for paraquat products (covering TK, SL and mixed SL), and stopped sanctioning new registrations and production permits for paraquat products (covering TK, SL and mixed SL). (2) After 1 July, 2014, all current registrations and production permits of paraquat SL and mixed paraquat SL will be cancelled in China, except those manufacturers which only produce paraquat TK for export. And all products of paraquat SL are forbidden to be sold and used in China after 1 July, 2016. Although the withdrawal of paraquat SL from Chinese market will greatly impact domestic paraquat manufacturers, paraquat won't disappear in China. In China, most paraquat is for export. For instance, in 2011, China exported about 84,400 tonnes of paraquat TK, including 42% TK and 45% TK while the paraquat TK output was 125,200 tonnes. In addition, paraquat is still popular in the domestic market. Moreover, a new paraquat formulation may be released to replace paraquat SL. For instance, in Nov. 2012, Shandong Luba Chemical Co., Ltd. successfully concluded the temporary registration of paraquat 50% soluble granules formulation (SG) through the Institute for the Control of Agrochemicals, Ministry of Agriculture for a valid period of one year (Related information about paraquat regulation was mentioned in Herbicides China New 1205, 1206 and 1207).
  3. Key regulations issued for pesticide industrial integration in China
  In Feb. 2012, with the conception of sustainable development in China, Twelfth Five-Year Development Plans for the Pesticide Industry (the development plans) following the theme of the Pesticide Industry Policy, namely industrial integration, were revealed. Detailing the core conception of industrial integration, the development plans are intended to direct the whole pesticide industry from 2011-2015. The Chinese government sets new targets for the whole pesticide industry in terms of industrial structure, product mix, R&D and environmental resources, including more centralized manufacture, more environmentally friendly and efficient pesticides, stronger R&D and better environmental protection. (Herbicides China News 1207: Key regulations for pesticide industrial integration in China)  
  4. Huapont Nutrichem acquires pesticide companies
  From 2011, Huapont Nutrichem Co., Ltd. (Huapont Nutrichem, changed from the name Chongqing Huapont Pharmaceutical Co., Ltd. at the end of Nov. 2012), has aggressively developed pesticide business by way of acquiring pesticide companies. In detail, in July 2011, Huapont Nutrichem acquired a 100% share of Nutrichem Company Limited; in May 2012, the company acquired a 31.24% share of Hebei Wanquan Kaidi Chemical Imp. & Exp. Co., Ltd. whose main products are metamitron and clethodim; meanwhile, the company also acquired a 49% share of Hebei Wanquan Hongyu Chemical Co., Ltd. (Wanquan Hongyu); in Sept. 2012, the company acquired a 58.26% share of Hangzhou Qingfeng Agro-chemical Co., Ltd. Huapont Nutrichem in total incurred USD161.47 million in acquiring these pesticide companies (Related information about Huapont Nutrichem is mentioned in China Herbicides New 1107, 1205 and 1210).   In addition, in 2012, Huapont Nutrichem took its first footsteps in the Brazilian market. In Feb. 2012, Huapont Nutrichem announced that the company had purchased a 7.5% share of CCAB Agro S.A. (CCAB) costing about USD20 million. CCAB is a private joint-stock company which is mainly engaged in the trade and administrative registration of pesticides in Brazil. (Herbicides China News 1202: Huapont plans to invest in Brazilian market)
  5. Jiangsu Kuaida upgrades by relocation   
  Jiangsu Kuaida Agrochemical Co., Ltd. (Jiangsu Kuaida), a subsidiary of Lier Chemical Co., Ltd., is currently undergoing its relocation into Rudong County Yangkou Chemical Industrial Park. According to the announcement, Jiangsu Kuaida planned to invest USD64.5 million in the relocation. After the relocation, the phosgene capacity will be expanded from 9,000t/a to 50,000t/a. And the phosgene derivative product capacity will reach 44,200t/a, including 1,500t/a chlortoluron, 1,500t/a fluometuron, 2,000t/a isoproturon, 3,000t/a diuron, 2,000t/a linurex, 2,500t/a mefenacet, 200t/a flufenacet, 500t/a bensulfuron-methyl, 200t/a pyrazosulfuron, 200t/a nicosulfuron, 600t/a iprodione and 30,000t/a stearyl chloride. From its initiation in early 2012, Jiangsu Kuaida predicts that the relocation will be completed by the first half of 2013. At present, Jiangsu Kuaida has more than 60 kinds of pesticide products which cover almost the whole domestic pesticide market and possesses a good reputation. Especially, Jiangsu Kuaida's herbicide business enjoys advantages compared with other domestic agrochemical companies and the market share of its sulfonylurea herbicide products ranks No.1 in China. 
  6. The number of 2,4-D acid technical manufacturers increases in China  
  In 2012, the number of 2,4-D acid technical manufacturers in China reached ten and an increasing trend is now being maintained. The main reason behind the increase is that the biggest domestic 2,4-D acid technical manufacturer, Changzhou Wintafone Chemical Co., Ltd. (Changzhou Wintafone), which had possessed a 20,000t/a 2,4-D acid technical capacity, stopped its 2,4-D acid production from H2 2012 due to problems of aging equipment and pollution. As a result, several domestic leading pesticide manufacturers have speeded up their 2,4-D acid production to acquire Changzhou Wintafone's 2,4-D acid market share. It is observed in detail that Hubei Sanonda Co., Ltd.'s 20,000t/a 2,4-D acid technical capacity has come into trial production and has been able to supply 2,4-D products since Oct. 2012; Jiangsu Good Harvest-Weien Agrochemical Co., Ltd.'s 10,000t/a capacity, Nanjing CF Agrochemical Co., Ltd.'s 18,500t/a technical and derivative product capacity and CAC Nantong Chemical Co., Ltd.'s capacities of 5,000t/a 2,4-D acid technical and 2,000t/a 2,4-D relevant formulations are under construction (Related information about 2,4-D acid is mentioned in Herbicides China New 1205, 1209, 1211 and 1212).      
  7. Fengshan Group's 5,000t/a trifluralin TC project completed
  Since the end of 2012, the second stage of Jiangsu Fengshan Group Co., Ltd. (Fengshan Group)'s 5,000t/a trifluralin technical project has been launched. This means that Fengshan Group's 5,000t/a trifluralin technical expansion project has been successfully completed (the first stage: 3,000t/a; the second stage: 2,000t/a). In Feb. 2012, Fengshan Group's first stage of 5,000t/a trifluralin technical—3,000t/a trifluralin technical production line was put into operation. At present, Jiangsu Fengshan's trifluralin technical capacity stands at 8,000t/a and top in the domestic trifluralin industry. Total trifluralin technical capacity in China was 16,500t/a in 2012 (Related information about Fengshan Group's trifluralin project is mentioned in Herbicides China News 1111 and 1209). 
  8. Significant asset reorganization in Sanonda
  At present Hubei Sanonda Co., Ltd. (Sanonda) is busy with its significant asset reorganization under which the company is liquidating Hubei Sanonda Tianmen Agrochemical Co., Ltd. (Sanonda Tianmen) and making Sanonda (Jingzhou) Pesticides and Chemicals Co., Ltd. (Sanonda Jingzhou) one of its wholly-funded subsidiaries. Sanonda Tianmen mainly manufactures paraquat 42% TK and 20% AS. Sanonda Jingzhou mainly manufactures carbamate pesticides with phosgene materials. The main product of the company is insecticides, including carbofuran, fenobucarb and isoprocarb (Herbicides China News 1211: Significant asset reorganization in Sanonda in progress). In Nov. 2012, Hubei Sanonda Co., Ltd. announced that the company had ceased its purchase of an 80.93% share of Jiangsu Anpon Electrochemical Co., Ltd. (Jiangsu Anpon) and a 70% share of Jiangsu Huaihe Chemicals Co., Ltd. (Jiangsu Huaihe) held by China National Agrochemical Corporation (ChemChina). As Sanonda explained, ChemChina could not finish the evaluation of Jiangsu Anpon and Jiangsu Huaihe in time. Thus, Sanonda decided to halt its plan to undergo significant asset reorganization (Herbicides China News 1205: ChemChina runs asset reorganization in Sanonda).
   9. China commences anti-dumping investigation into pyridine import
  On 21 Sept., 2012, the Ministry of Commerce of the People's Republic of China launched an anti-dumping investigation of the pyridine products imported from Japan and India. The certain period of this anti-dumping investigation is 1 July, 2011 to 30 June, 2012. This anti-dumping investigation originated from four Chinese leading pyridine manufacturers' applications which indicated that due to this low-price dumping, the total market share of pyridine products from Japan and India has been floating at around 20% in China which has suppressed the Chinese pyridine industry severely. As for the outcome of the anti-dumping investigation of pyridine products from Japan and India, the Ministry of Commerce of the People's Republic of China will issue the same after 21 Sept., 2013 or 21 March, 2014 at the latest. If the anti-dumping is confirmed by the investigation, at such time, China will levy anti-dumping tax on pyridine products from Japan and India (Herbicides China News 1210: China sets anti-dumping investigation on pyridine import).  
  10. Australia resumes anti-dumping investigation into China's glyphosate formulation
  On 16 Nov., 2012, the Australia Customs and Border Protection Service (ACBPS) released Notice No. 2012/54, which claimed that the ACBPS will resume its anti-dumping investigation into glyphosate formulations from China as a result of the Australia Trade Measures Review Officer (ATMRO)'s revocation of the ACBPS's decision on 23 Oct., 2012 to terminate the investigation into glyphosate formulations exported to Australia from China and on 2 Aug., 2012, the Chief Executive Officer of the ACBPS terminated the anti-dumping investigation. Later, on 28 Aug., 2012, Nufarm Ltd. (Nufarm) lodged an application with ATMRO for a review of the ACBPS's termination decision, and then ATMRO revoked ACBPS's termination decision of 23 Oct., 2012.      
  The ACBPS's resumption of its anti-dumping investigation didn't have great impact on the ex-factory price of China's glyphosate products in Nov. and Dec. 2012. The ex-factory price of China's glyphosate 95% technical was about USD5,547/t in Oct. 2012, which was the highest in 2012, and it stayed at a high level in Nov. 2012, which was USD5,484/t. In Dec. 2012, the price decreased slightly to about USD5,390/t.
  Contents of Herbicides China News 1301:
  Jiangsu Sword enhances its pesticide capacity
  Jiangsu Flag to expand herbicide capacity
  Anhui Huaxing’s glyphosate and nicosulfuron projects failed to achieve expected profit
  Noposion launches herbicide formulation project
  Pure pyridine price continues to rise in Dec. 2012
  Trifluralin falls to lowest price in Dec. 2012
  Chinese paraquat witnesses recovery in H2 2012
  Mild growth in Chinese fomesafen market
  Chinese diuron capacity witnesses growth in 2012
  Tebuthiuron technical supply tight
  Glufosinate-ammonium supply came under pressure in H2 2012
  Acetochlor registration situation in China
  Herbicide technical registrations in China in 2012
  Herbicides China News, a monthly publication issued by CCM on 15th every month, provides you with the latest occurrences, exclusive analysis on the market trend as well as professional reviews on competitiveness of companies, products and relative industries in China’s herbicide industry.
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