Butachlor price falls 15% to RMB40,000 per ton; will short supply continue?

The prices of the two mainstream herbicides, acetochlor and butachlor, rose significantly in the past year, and will remain high this year because of the lack of supply. 

According to the herbicide technical price index published by Sino Agri on February 6, 2022, the price of butachlor is RMB50,000 per ton (converted to100% content), which is RMB47,000 per ton for the actual product. It was quoted at RMB40,000 per on February 10, down 15% over last week. 

However, the actual product price is still up 80% over the same period last year. The price of acetochlor remains strong, at RMB150,000 per ton (converted to 100% content), up 104% year on year. China’s rice pesticide application season is drawing near, which will be a strong backup for the price of acetochlor. 

MEA (2-Methyl-6-ethylaniline) and DEA (2,6-Diethylaniline) are important intermediates of acetochlor and butachlor respectively. Huai’an Shuangyang and Zhongnongfa Henan are the two prime suppliers of MEA and DEA in Chinese market. The former was shut down due to a fire in the industrial park where it is located, whilst the latter was temporarily shut down for the Beijing Winter Olympics. 

These two manufacturers are gradually resuming supplies, but in limited quantities. Moreover, the MEA’s upstream material ortho-nitrotoluene is in short supply due to the limited production load as the prime manufacturer, Shandong Tsaker, was affected by Beijing Winter Olympics. As the upstream and downstream relationship of supply and demand of the product is relatively fixed, the supply and price are quite correlated and thus can be affected by multiple factors. There are MEA supplies from India, but at higher price. 

Acetochlor Supplier Capacity

Founded in 1887, ALB US is a prime MEA supplier in the United States, being an international catalyst retardant industry leader, which used to be a supplier to Monsanto. In February 2021, ALB executed a contract with Mineral Resources to jointly expand lithium mineral business via setup of the joint venture MARBL in Australia.

It is reported that the ALB U.S. stopped MEA production at its two subsidiary factories two years ago, which had a big impact on Monsanto’s supply of acetochlor to the U.S. market. In 2021, ALB planned sale of its MEA production line.