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China’s glufosinate export growth slowing down since 2016, what will happen this year?
May. 29, 2020
The pandemic has led to a decline in the export of glufosinate in January and February, while March witnessed a positive year-on-year growth. From January to February, due to the pandemic, production load was low, logistics was not smooth, and exports fell 48% to 577 tons. With China's effective pandemic containment, part of the backlog was cleared in March, with exports increasing by 24%, up 941 tons. In the first quarter of the year, total exports dropped by 19%.
The supply of glufosinate has yet to resume. Domestically, only Lier and Veyong resumed production immediately after the Chinese New Year. At the start of April, Shandong Yisheng gradually resumed production, while Yonon and Ruikai were unable to resume production to date, due to the limited supply of raw materials. Domestic supply is expected to be back to normal in the third quarter of this year. Outside the country, the lockdown in India had a certain impact on UPL’s production, which needs to be restored, following the progress of local pandemic containment.
The price of glufosinate is expected to remain at Yuan130,000 per ton in the short-term. Since the end of last year, when Yitai Technology’s production capacity was restricted due to environmental non-compliance, the price of glufosinate has rebounded continuously from a low of Yuan108,000 per ton, remaining stable at Yuan130,000 per ton, which has lasted for more than two months. In the short-term, Yitai Technology’s supply will still be limited, while the price of the intermediate, methyldiethoxyphosphine, has risen, encouraging manufacturers to jack up the price. CICC judged that the price of glufosinate will maintain at Yuan130,000 per ton.
In addition, Lier’s technical upgrade is expected to significantly reduce production cost. After the completion of the company’s MDP project in March, it is estimated that the production cost of glufosinate may decrease by roughly Yuan20,000 per ton. After production is brought back to full capacity, the cost is expected to be reduced by Yuan200 million in total.
Source: CICC
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