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.
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