H1 2016 saw continued depression in the
Chinese chlorpyrifos market and the market price kept hitting new lows. Most
producers suffered great business pressure, due to slack demand from both the
domestic and overseas markets. This downward trend continued on into Q3, which
witnessed a fall in both market supply and price. However, things may yet
improve in Q4.
Source: Baidu
- Market supply
From July-Sept. 2016, a total of ＜7,000 tonnes of chlorpyrifos TC
were produced in China, significantly down 50%+ QoQ (= quarter on quarter) and
20%+ YoY (year on year), according to the National Bureau of Statistics of the
People's Republic of China. All three months saw a lower output over the same
months last year, especially Aug. when monthly output reached a new low.
The decline in supply was mainly ascribed
to the following two reasons:
1. Many plants in Jiangsu and Zhejiang
provinces cut or even suspended production for maintenance, affected by high
temperatures, national environmental inspections, and the 2016 G20 Summit.
2. Weak market demand forced manufacturers
to reduce production so as to ease pressure on inventory and production costs.
- Market price
Despite the decreased supply, the domestic ex-works price of chlorpyrifos TC
remained low in Q3 2016, according to CCM’s price monitoring. This was mainly
because market demand still hadn't improved. Most purchasers were not in
hurry to buy and bided their time in hope of a lower price.
However, the price went up slightly in Sept. after falls in July and Aug,
mainly thanks to the following factors:
1. Increased raw material prices
Badly affected by the national environmental inspections, most producers of
chlorpyrifos TC intermediates had to reduce or even halt production, leading to
declined market supply and increased prices. Moreover, just a few chlorpyrifos
TC manufacturers have realised self-supply of these intermediates. Given this
and the increased intermediate price and reduced chlorpyrifos TC inventory,
many leading chlorpyrifos producers raised their quotations.
2. Low supply in Aug.
Many domestic producers of chlorpyrifos TC suspended production for maintenance
in mid- to late-Aug., resulting in unprecedented low supply and further causing
a slight price rise in Sept.
Monthly ex-works price of chlorothalonil
98% TC in China, Oct. 2015-Oct. 2016
Source: CCM
- Market prediction for Q4
In Q4 2016, the chlorpyrifos TC market is expected to improve in terms of both
sales and price given the following aspects:
-
Raw materials: production and supply of
intermediates may continue to be limited given that national environmental
inspections are said to carry on into Oct.
-
Production costs: prices of some basic
chemicals have kept rising, pushing up production costs
-
Sales season: sales volume is expected to
be boosted by demand, as transactions had increased in Q4 in previous
years
-
Positive influence from the National
Agrochemical Exchange Meeting & AgroChemEx 2016
Of course, there is still a possibility that some plants will be attracted by
the rising price and resume production in Oct. If so, the increased supply will
be unfavourable for a rise in market price in the coming period.
This article comes from Insecticides China News 1610, CCM
About CCM:
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Tag: chlorpyrifos