Glufosinate TC producers upgrade technology and product, while price only ticks up in late 2023 12-15-2023

Summary: China's glufosinate-ammonium TC market has been depressed in 2023; for a long while, the price of glufosinate-ammonium TC was on the decline. The price rebounded in Nov., backed up by the producers' determination to end the price fall. Although a continuous bounce lacked solid support in Dec., the producers still held a positive view in the long-term development. Many of these companies have actively engaged in improving production technology for glufosinate-ammonium TC as well as in developing glufosinate-P business, in order to seize greater market share and reap more benefits.

Glufosinate-ammonium, as a main herbicide for genetically modified (GM) crops, has received much attention like glyphosate and dicamba in China in 2023, though the ex-works price of glufosinate-ammonium TC followed a downward trend for most of the time this year due to sluggish downstream demand. Besides, with large-scale new capacity put into operation in recent years, the once lucrative glufosinate-ammonium TC business saw nosedive in profits. Seeing this, Chinese glufosinate-ammonium TC producers ramped up efforts in technological transformation, especially in technologies to improve the synthesis of key intermediates, so as to increase yield and reduce costs. In addition, they stepped into business of glufosinate-P TC, a product with higher added value. This does not mean these glufosinate-ammonium TC producers hold a negative view of glufosinate-ammonium market. In fact, more companies will upgrade their glufosinate-ammonium TC production lines in China in 2024, along with the release of new glufosinate-P TC capacity.

Price trend of glufosinate-ammonium TC in 2023

  • Jan.–Aug.: In this period, the ex-works price of glufosinate-ammonium TC kept falling in China; by Aug., the monthly price dropped by about 60% from the Jan. level. Demand for China's glufosinate-ammonium TC shrank as overseas stocks were plenty, and the slack demand forced the price down.
  • Late Aug.–Oct.: In this period, the price basically stabilised, with small dips though. The stable price was the result of two factors: first, overseas stocks were much consumed and some buyers turned active in purchasing glufosinate-ammonium TC products, which stopped the price from going further down; second, the price of glufosinate-ammonium TC dropped close to the cost price, which drove the producers to lower the output, and even pushed some producers to suspend production and outsource TC products to maintain their production of glufosinate-ammonium formulations.
  • Late Oct.–Dec.: After a small decrease in late Oct., the price bounced back in Nov., and in H1 Dec., some producers offered glufosinate-ammonium TC at a price crossed USD9,845/t (RMB70,000/t). As the peak season—stockpiling in the winter—came, sales volume of glufosinate-ammonium TC products grew, so did the price. However, it should be minded that actually, there was no significant increase in the downstream demand; other reasonable explanations except the producers' prop-up efforts can hardly be found for the quick price recovery. The reality is, at the end of this year, there still lack factors to support the glufosinate-ammonium TC price. In mid-Dec., some producers lowered their quotations for glufosinate-ammonium TC products, even though the majority of producers continued to prop up to avoid losses.
  • Figure Ex-works price of 95% glufosinate-ammonium TC in China in H2 2023

    Source: CCM

    Figure Monthly ex-works price of 95% glufosinate-ammonium TC in China, Jan. 2022–Nov. 2023

    Source: CCM

    Despite plunging profits, glufosinate-ammonium TC producers actively seek development via technological transformation and product upgrade


    Following the nosedive in the price, profit margin of glufosinate-ammonium TC business has greatly contracted in recent years. The Dec. 2023 price is about 76% less than the Jan. 2022 price. The biggest glufosinate-ammonium TC producer Lier Chemical Co., Ltd. (Lier Chemical) is thus hit the hardest by the price fall. The company reported 22.42% YoY decline in its revenue in the first three quarters in 2023, and the net profit attributable to equity holders of the parent company down 62.47% YoY in the same period. Many other glufosinate-ammonium TC producers also reported decreases in profits from glufosinate-ammonium TC business, some even revealed short-term losses in the business.


    The price fall is a natural result of the release of new capacity in recent years. The age of huge profits in this business is gone for ever. In the face of thinner profits, the glufosinate-ammonium TC producers have tried hard to boost profits through technological transformation and product upgrade.


    Through technological transformation, glufosinate-ammonium TC producers can reduce production costs and thus fatten the profits. Major producers such as Lier Chemical and Jiangsu Sevencontinent Green Chemical Co., Ltd. (Jiangsu Sevencontinent) have achieved positive results in raising productivity and cutting costs via improving production process. It is reported that in 2021–2022, Lier Chemical cut the production costs from RMB60,000 (USD8,438) per tonne to RMB50,000 (USD7,032) per tonne by switching from Grignard reaction to aluminium method in the production of the intermediate methyldiethoxyphosphine, which spares the trouble of recovering 2-methyltetrahydrofuran and 1,2,4-trimethylbenzene, increases yield and product quality, reduces the use of organic solvents, and cuts VOCs emissions and wastewater discharge. The intermediate methyldichlorophosphine (MDP) used in Jiangsu Sevencontinent's glufosinate-ammonium TC production is provided by its subsidiary Honghu Yitai Technology Co., Ltd. The subsidiary has improved the technology for MDP synthesis and helps Jiangsu Sevencontinent reduce the production costs to some extent.


    Chinese glufosinate-ammonium TC producers also have their eyes on glufosinate-P TC. As of late 2023, there are only two active glufosinate-P TC producers in China—Lier Chemical and Yongnong BioSciences Co., Ltd. (Yongnong BioSciences). Yet the majority of glufosinate-ammonium TC producers have obtained pesticide registration certificates for glufosinate-P TC products. According to Lier Chemical, both glufosinate-ammonium and glufosinate-P are believed to enjoy a good prospect. By the end of 2023, the company has: in glufosinate-ammonium TC business, completed bringing down production costs and acquired registration certificates for a variety of glufosinate-ammonium products; in glufosinate-P TC business, built up 20,000 t/a enzyme route glufosinate-P TC capacity in Jinshi City of Hunan Province. It expects another 10,000 t/a glufosinate-P TC capacity (in Jinzhou City of Hubei Province) will come into operation in 2024. Limin Group Co., Ltd. (Limin Group) also expressed its optimistic view on the glufosinate-ammonium market in the future. Limin Group's subsidiary Hebei Veyong Bio-chemical Co., Ltd. (Veyong Bio-chemical) acquired government approval of the environmental impact report of the 1,000 t/a glufosinate-ammonium technological transformation and 10,000 t/a glufosinate-P construction project (phase I) in Sept. 2023. Veyong Bio-chemical adopts a process combining continuous gas-phase method and biological continuous catalytic method, and makes full use of existing equipment. The project has come into equipment installation and commissioning stage; trial run is expected to start before the 2024 Spring Festival.


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


    About CCM:

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