Thiamethoxam Prices Rebound, global pesticide industry at crossroads?

- Thiamethoxam demand has stayed stable and its price has rebounded. 

- Excessive capacity increase is not good for future development, but cruel ″involution″ may compel innovative breakthroughs.

- A rational review of India is recommended, but Chinese pesticide companies may need to call for policy changes. 

Recently, the prices of thiamethoxam and clothianidin have rebounded, with the market price of thiamethoxam returning to RMB66,000 yuan from a historic low of RMB60,000 yuan in April this year. Currently, major manufacturers have stopped giving quotes while there is speculation that the price may return to RMB70,000 yuan.

Digging deeper into the product chain, the details for thiamethoxam’s two key intermediates are as follows: Oxadiazine is quoted at a factory price of RMB40,000 yuan and a transaction price of RMB35,000 yuan, close to the historical low, while CCMT is quoted at a factory price of RMB35,000, higher than the historical low in 2015. As the prices of these two n-1 intermediates have bottomed out, the current price rises can be considered as rebounds from the bottom. 

Based on incomplete statistics, the production capacity of thiamethoxam and its key intermediates are shown in the chart below. China’s thiamethoxam built production capacity is nearly 30,000 tons, with 50% being produced this year. In India, the built production capacity is roughly 10,500 tons, where Deccan has been running at a 60% load, mostly for customized production, while other factories in India are running at relatively low loads. 

The thiamethoxam industry chain is characterized by the relatively centralized production of intermediates, where CCMT and oxadiazine are mainly supplied by three to four leading companies in China, which also supply these two intermediates to Indian companies.

According to feedback from a survey of Indian readers, in the 2022/2023 season, India imported 8,600 tons each of CCMT and oxadiazine over 12 months. This import volume is relatively stable, and the source country was always China, regardless of whether the imports came from China or other countries. According to the survey, nearly 4,000 tons (content-converted) of India’s thiamethoxam technical are exported by Deccan, 4,300 tons are exported by other Indian companies, and 1,000 tons are kept for the Indian domestic market. India’s overall output is around 10,000 tons. On the other hand, China’s thiamethoxam export volume is estimated to be 8,000 to 10,000 tons (content-converted), while 2,000 tons are for the Chinese domestic market. In summary, the annual global demand for thiamethoxam is around 20,000 to 25,000 tons, remaining stable for quite a long period. Brazil is currently the largest market for thiamethoxam, which, if banned, will lead to the end of the product.

While most intermediates purchased by Indian companies come from China, according to readers’ feedback, India’s purchase price is not even higher than the price on the Chinese market. In the international market, India’s thiamethoxam competitiveness is not weaker than China’s.

According to AgroPages’ preliminary statistics, since 2019, more than 300 new pesticide projects have been launched in China, many of which are near completion and operation. Industry professionals have called for deliberate and rational planning for the launch of new capacity to avoid excessive capacity increase, while demanding certain policy adjustments to help the agrochemical industry get through its current difficulties. Of course, cruel ″involution″ may also accelerate China’s pesticide innovation, compound creation and industry rebuild. 

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