Glycine output in China expected to decline in October 09-20-2023

Summary: In the first half of Sept., China's glycine output levelled off month on month, since the operating rate of glycine producers in mid-to-late Aug. gradually turned from up to stable. It is estimated that domestic glycine output will decline in the next month.

In the first half of Sept., China's glycine output levelled off month on month, since the operating rate of glycine producers in mid-to-late August gradually turned from up to stable. It is estimated that domestic glycine output will decline in the next month.

 

In Sept., downstream product glyphosate saw a decreasing output as producers received fewer orders for glyphosate, leading to lower downstream demand for glycine. As a result, glycine producers also continued to maintain a cautious approach to production. They have been largely reluctant to prepare more stockpiles, given the previous increase in production and the abundance of inventory in the market.

  • Hebei Donghua Jiheng Co., Ltd. and Shijiazhuang Donghua Jinlong Chemical Co., Ltd.: From late Aug. to the first half of Sept., they decreased the operating rates of glycine due to the reduced received orders;

  • Hubei Trisun Chemicals Co., Ltd.: The glycine it produces is mainly used in the company's own glyphosate production, and in September, its glycine output fell in line with the reduction in glyphosate production.

  • Linyi Hongtai Chemical Co., Ltd.: The company, which had been shut down for a long time, resumed production at the end of August. But in Sept., the company decreased its running rate from 50% to 20%–30% and cut the glycine output after orders were delivered, with no intention of stockpiling.
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    According to glycine producers, in the first part of Sept. glycine gross profit presented a MoM increase, mainly from its rising ex-works price and falling costs—the price of its raw material, liquid chlorine, dumped significantly. However, glycine's gross margins remained low, making it unattractive for the producers to increase production. Although the ex-works price of glycine increased, some buyers bargained for lower prices in actual transactions. With the thin profits, most glycine producers' production enthusiasm is relatively low. In addition, the ex-works prices of some other feedstocks, such as acetic acid, ammonia and methanol, are still on the rise, which puts cost pressure on the producers.

Table The output of glycine by Chinese major manufacturers, first half of Sept., 2023
No. Manufacturer Abbr. Capacity, t/a Output in the first half of Sept., tonnes Remark
1 Hubei Trisun Chemicals Co., Ltd. Hubei Trisun 100,000 4,000 The company produces glycine mainly for its own production of glyphosate TC.
2 Linyi Hongtai Chemical Co., Ltd. Linyi Hongtai 70,000 1,550 The company had resumed production at the end of Aug., when it rant at an operating rate of 50%, while by Sept. the rate fell to roughly 20%–30%.
3 Hebei Donghua Jiheng Co., Ltd. Donghua Jiheng 192,000 1,500 The two companies are subsidiaries of Hebei Donghua Chemical Group Co., Ltd.
4 Shijiazhuang Donghua Jinlong Chemical Co., Ltd. SDJC 1,150
5 Yuanshi Xinhongsheng Pharmaceutical Technology Co., Ltd. Yuanshi Xinhongsheng 8,000 440 /
Source: CCM


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


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