To combine advantages of fluorinated intermediates and pesticide industry to enhance competitiveness of Chinese manufacturers

″China has obvious advantages in resources, industrial chain and technical advancement. The downstream pesticide manufacturers ought to incorporate the three advantages in their business activities and make full use of these advantages by breaking through the industry limit, such that China’s superiority in fluorinated intermediates can become China’s advantageous industry sector in favor of agrochemical development,″ said Liu Chuang, Director of Specialty Chemicals Business Unit of Sinochem Lantian, at  2023 China Pesticide Industry Chain Forum (CPICF) - Fluorinated Aliphatic Novel Pesticide, which was held in Shanghai on May 19-20, 2023, as sponsored by Sinochem Lantian.

The Forum focused on discussion of fluorinated pesticides, covering topics related to the competition between Chinese and Indian manufacturers, China’s pesticide fluorination advantage, fluorinated fine chemicals, novel pesticide registration, patenting and terminal market operation. The purpose of discussions was to explore growth potentials of the fluorinated pesticide market and discover drivers to the business development towards establishment of a sound and sustainable agrochemical ecosystem.

Liu Chuang, Director of Specialty Chemicals Business Unit of Sinochem Lantian, speaking about thew downstream fluorinated aliphatic novel pesticide industry deployment

At the Forum, Liu Chuang shared his opinions on development of the fluorinated intermediates and the downstream agrochemical industry:

At present, the pesticide market has fallen to the bottom of a business cycle, where homogeneous competition is much intensified in the technical material market. In this context, it is worthy of note that fluorinated pesticides are strongly resilient to the unfavorable business cycle and market fluctuation. It is possible for agrochemical enterprises to use fluorinated pesticides as a supportive product portfolio, which is of the advantage of stable operation to better adapt to the future market uncertainties. Nevertheless, it should be noted that during an industry downturn, a manufacturer engaged in fluorination of pesticides and intermediates need to carefully watch its capacity in innovation and competition, and to develop itself in a manner capable of making breakthrough into the industry limit.

After the 1980s, the features of the high efficiency, low toxicity and environment friendliness of fluorinated pesticides led to a rapid development of the fluorinated pesticide market, thus having become one of the key directions for the global pesticide development. In this circumstance, the fluorine-containing fine chemical market has become a fastest growing market with highest added value among Chinese chemical fluorination industry sectors, which is also of a high technical barrier as well. In recent years, disruptive changes have taken place in the innovation of fluorinated fine chemicals, such as the duplex cross binding of fluorine chemistry and chemical fluorination, as well as the involvement of synthetic biology.

Given that the structure and trending have changed in India’s import of fluorinated chemicals in recent years, the fluorination-oriented industry sectors in India, especially those related to agrochemicals, is in a rapid upward development, which is having an impact on the competition between China and India. Today, comparing the Indian and the Chinese agrochemical industry, especially the fluorination of agrochemicals, China’s fluorinated intermediates have instead facilitated India’s export of fluorinated technical material. As such, the Chinese enterprises need to make a breakthrough into the industry limit and make the most of the advantage of China’s fluorinated intermediates, which should be developed into an advantageous national agrochemical industry sector.

In the keynote report, Liu Chuang analyzed the industrial relevance between fluorinated intermediates and fluorinated pesticides, having elaborated on the several pesticide varieties with good potentials of development. Liu Chuang called for integrated development of the Chinese fluorinated pesticide industry to leverage the advantage of industry consolidation to enhance competitiveness.

Fluorinated intermediates and fluorinated pesticides can be subdivided into multiple sectors, which are complementary to each other while being self-characteristic. There are many kinds of fluorinated pesticide intermediates, which, according to structure, can be divided into aliphatic fluorides, fluorobenzenes, trifluorotoluene and fluorinated heterocyclic compounds. Among them, there are few varieties of aliphatic fluorides. As the intermediates containing trifluoromethoxy are similar in structure and performance to intermediates containing trifluoromethyl, they are classified as trifluorotoluene intermediates.

The aliphatic fluoride trichlorotrifluoroethane is used for production of cyhalothrin, tefluthrin, bifenthrin, permethrin; dichlorodifluoromethane is used for production of flucythrinate, brofluthrinate, primisulfuron-methyl; and ethyl 4,4,4-trifluoroacetoacetate is used for production of thiazopyr.

The p-Fluorotoluene series include tetrafluoroterephthalonitrile, tetrafluoroterephthalic acid, 2,3,5,6-tetrafluorobenzoic acid, 2,3,5,6-tetrafluorobenzyl alcohol, 2,3,5,6-tetrafluoro-1,4-benzenedi methanol and 4-Methoxymethyl-2,3,5,6-tetrafluorobenzyl alcohol, being intermediates of fluorinated pyrethroids such as transfluthrin, dimefluthrin and tefluthrin.

Figure 1   Prices of Major Pesticides VS Typical Fluorinated Pesticides

In the circumstance of overall downturn of the pesticide industry, compared with the major pesticides such as glufosinate and glyphosate, the price trend of some of the fluorinated pesticides appears relative unaffected. Fluorine chemistry plays an irreplaceable and key role in product differentiation and added value application of fluorinated pesticides.

Key fluorinated pesticide varieties

Fluorinated pesticides have the features of high activity, high efficiency, low toxicity and environment friendliness, which fall in line with the current pesticide development requirement, having attracted close market attention.

Blockbuster product

• CAGR of SDHI fungicides such as fluxapyroxad, benzovindiflupyr and fluopyram has reached 21.9% for consecutive years, patents of which would expire very soon, thus providing great growth potential in the years ahead.
  

• Global demand for pyroxasulfone in 2022 broke 3,500 tons, having been included in the product portfolio of BASF, Bayer and FMC.
  

Major Product

• Cyhalothrin and fipronil, which were launched to market many years ago, still steadily rank the insecticide top 10.
  

Expectation

• Flonicamid and sulfoxaflor are high-efficient insecticides, with novel mode of action, have appeared to surge in recent years.
  

• Mefentrifluconazole is BASF’s epoch-making novel product, being scheduled for release to more than 50 countries, with expected annual peak sale of over $1 billion.
  

• Broflanilide is a novel insecticide jointly developed by Mitsui Chemicals and BASF, expected to hit an annual peak sale of $850 million.

Table 1   Key Fluorinated Pesticide Varieties

Fluorinated aliphatic intermediate industrial chain

The research of fluorinated intermediates is concentrated on the process of continuous optimum synthesis, which efficiently and mildly introduces fluorine, difluoromethyl, trifluoromethyl and trifluoromethylthio substituent groups to improve yield and product purity while reducing costs. Due to its overall maturity, fluorinated aromatic intermediates are expected to have a stable market growth as technology and the downstream applications are advancing, whilst fluorinated aliphatic and heterocyclic intermediates are also expected to have a rapid growth trend thanks to the excellent performance.

Fluorinated aliphatic intermediates can be synthesized by reaction of chloralkane and olefine chlorides with hydrofluoric acid. The synthesis of fluorinated aliphatic intermediates is of high technical barrier, at considerable risk as well. Pesticide manufacturers that would want to step into production of the upstream fluorinated aliphatic intermediates are usually discouraged, whilst it is similarly difficult for intermediate manufacturers to move into production of the downstream fluorinated pesticides. The fluorinated aliphatic series include trifluoride series, difluoride series and hexafluoro series, where the several primary series of intermediates have shown rapid growth in recent years.

Sinochem Lantian is engaged in research and development, production and marketing of fluorinated chemicals, covering 100-plus product varieties across the entire chemical industry of fluorination. The productions from Sinochem Lantian are positioned towards the upstream end of the agrochemical industry, which is the strength of the company, while stretching to the entire upstream and downstream industry chain based upon the trifluoro series of the company. Sinochem Lantian’s fluorinated intermediate industry chain has covered the whole industrial chain, including the most basic fluorine-containing raw material fluorite and the fluorine-containing fine chemicals of highest added value, where each link of the industrial chain is extended to all directions, which can ensure the stable and smooth running of the whole supply chain as well as a stable supply of products even if when market fluctuates.

Analysis of competition between Chinese and Indian pesticide manufacturers

Multinational companies represented by Syngenta, BASF, Bayer, Corteva and Kumiai Chemical have shifted their production capacity to countries like India, China and Mexico in the off-patent period of pesticides. Before 2010, the Chinese enterprises grasped the strategic opportunities through firm agreement with multinationals; In the last five years, more and more Indian companies have begun to establish long-term partnership with multinationals, and the Indian agrochemical market is growing robustly towards the goal of becoming a new global agrochemical center.

Pyroxasulfone

Pyroxasulfone is an isoxazole herbicide developed by Kumiai Chemical in 2002, its active ingredient patent in China (CN1257895C) already came off on February 6th, 2022. According to statistics, the global capacity of pyroxasulfone in 2022 exceeded 3,500 tons. Key raw materials for pyroxasulfone include ethyl 4,4,4-trifluoroacetoacetate, methylhydrazine and dichlorofluoromethane (R22). In respect of raw materials of pyroxasulfone, China’s industry chain is superior to India.

Flonicamid

Flonicamid is a picolinamide insecticide discovered by ISK. In recent years, flonicamid sees a great market prospect, because of the depression of neonicotinoid insecticides represented by thiacloprid and thiamethoxam. Compared to the process based on ethyl 4,4,4-trifluoroacetoacetate, the trifluoroacetyl chloride-based process is of a much lower cost, whilst India does not have a trifluoroacetyl chloride manufacturer. Moreover, the trifluoroacetyl chloride-based process requires methyl 3-methoxyacrylate (MAME). This is another key raw material, for which Chinese manufacturers own cost advantage.

Chlorfenapyr

Chlorfenapyr is an arylpyrrole compound-based insecticide, miticide and nematicide developed by American Cyanamid Company (now owned by BASF) in 1985, the patent for which expired in China in 2008. According to statistics, there is a consumption of annually 3,000 tons of chlorfenapyr technical, only in China. The trifluoroacetyl chloride-based process is more economical and more environment friendly than the trifluoroacetic acid-based process; BASF is obliged to move its factory to India and Mexico because no Chinese chlorfenapyr manufacturers use the trifluoroacetyl chloride-based process.

Lastly, compared to India, China has obvious advantages in terms of resources, industrial chain integrity and process advancement. The downstream pesticide enterprises ought to incorporate the three advantages in their supply chain, value creation chain and development chain to grow the industry competitiveness of the Chinese enterprises; Chinese enterprises need to utilize the advantage of the fluorinated intermediates to develop new structure of compounds, create and optimize production process and the whole industrial chain; and should grow the innovation capacity and cultivate a new agrochemical industry pattern to build a new, sound and sustainable agricultural ecology, as backed by the strength of the existing industrial chain in China.