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.