Glycine production in China further reduced in early Jan.

Keyword:
Publish time: 12th January, 2024      Source: CCM
Information collection and data processing:  CCM     For more information, please contact us
  

    Summary: In Jan., glycine output in China further reduced, with producers operating at an average rate of around 32% in early the month. On the one hand, the downstream demand for glycine was low, and the sales pressure of glycine producers remained. On the other hand, with the lowered price and profit, glycine producers were cautious in production.   

  

    In early to mid-Jan., the average operating rate of glycine producers in China was roughly 32%. Entering Jan., Shijiazhuang Donghua Jinlong Chemical Co., Ltd. (SDJC) reduced the operating rate and Hebei Donghua Jiheng Co., Ltd. (Donghua Jiheng) entered temporary suspension; Linyi Hongtai Chemical Co., Ltd. (Linyi Hongtai), though having resumed production at the end of Dec., ran at a low operating rate; the production at Yuanshi Xinhongsheng Pharmaceutical Technology Co., Ltd. and Hubei Trisun Chemicals Co., Ltd. remained relatively stable.   

  

        

  

    On the one hand, the downstream demand for glycine was low and the sales pressure of glycine producers remained. In Jan. 2024, the supply of glycine in the market gradually diminished and the inventory was not high. Meanwhile, the downstream procurement was not active and glycine producers found it difficult to obtain orders.   

  

        

  

    On the other hand, upstream raw material costs decreased compared with the previous month, and the glycine prices went down with profits remaining low, which made glycine producers cautious in production. In mid-Jan., the ex-works price of urotropine turned up to stable and the price of other raw materials such as acetic acid and ammonia, also presented a decline. Glycine producers had made efforts to adjust the ex-works prices, but due to the downstream downturn, the acceptance of the offers was limited. To get more orders, the producers had to cut prices. Coupled with the fact that the Spring Festival is approaching, the enterprises are mainly consuming inventory, thus reducing output.   

  

        

  

    Notably, glycine producers generally advance their production based on orders while preparing a small amount of inventory. Mainstream producers like SDJC, Donghua Jieheng and Linyi Hongtai, adjusted their output according to orders as well as raw material costs.   

  
  •     SDJC and Donghua Jieheng produced based on orders some time ago. By Jan., the order quantities decreased, so they reduced their output. With the further decline in glycine raw material costs, Donghua Jieheng, which was still in temporary shutdown in the first half of Jan., planned to resume production before the Spring Festival in mid-Feb.   
  •   
  •     In Jan., Linyi Hongtai's inventory was almost consumed. Coupled with the decline in the cost of glycine raw materials, the company resumed production.   
  •   Table Operating rate of Chinese major glycine producers, early Jan., 2024
      
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
                No.                        Manufacturer                        Abbr.                        Capacity, t/a                        Operating rate                        Remark           
                1                        Yuanshi Xinhongsheng Pharmaceutical Technology Co., Ltd.                        Yuanshi Xinhongsheng                        8,000                        65%                        /           
                2                        Hubei Trisun Chemicals Co., Ltd.                        Hubei Trisun                        100,000                        40%                        The company produces glycine mainly for its own production of glyphosate TC.           
                3                        Linyi Hongtai Chemical Co., Ltd.                        Linyi Hongtai                        70,000                        40%                        Production resumed at the end of Dec. 2023. The company had resumed production at the end of Aug., when it rant at an operating rate of 50%, while the rate fell to roughly 20%–30% in Sept., and then rose to 35%–40% in Oct. In early to mid-Nov., the company suspended production again.           
                4                        Shijiazhuang Donghua Jinlong Chemical Co., Ltd.                        SDJC                        192,000                        15%                        The two companies are subsidiaries of Hebei Donghua Chemical Group Co., Ltd.           
                5                        Hebei Donghua Jiheng Co., Ltd.                        Donghua Jiheng                        0%           
      

    Source: CCM

      Source:CCM

      

      More information can be found at CCM Glyphosate China Monthly Report.

      

        
      

      About CCM:

    CCM is the leading market
    intelligence provider for China's agriculture, chemicals, food & feed and life science markets. Founded in 2001, CCM offers a range of content solutions, from price and trade analysis to industry newsletters and customized market research reports. CCM is a brand of Kcomber Inc.

     
    For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.