On May 12, 2022, the bio-fermentation-based DHPPA project of Anhui Anhe Biotechnology, a wholly owned subsidiary of Huimeng Biotech Group, was put into operation.
The new production base covers a land area of 40,000 square meters with a floor area of 15,000 square meters. The project takes an investment of RMB230 million, including the spending of RMB103.73 million on fixed assets. After the project is put into operation, it will contribute an annual capacity of 5,000 tons of DHPPA, 2,500 tons of MAQ and 500 tons of HPPA-ET.
To this end, China’s total capacity of DHPPA has reached nearly 17,000 tons, which is indeed a large capacity. However, the production of DHPPA has been restrained over the last one and a half years due to the short supply of its upstream raw material hydroquinone. Last year, China’s actual output was around 6,000 tons, 3,000 tons of which was produced by Jinzhou Sihai Biochemistry. Today, as Huimeng Biotechnology gradually joins production, the supply of the product is expected to gradually get back to normal. At present, the price of imported hydroquinone has reached RMB 82,000 per ton, whilst the price of home-made hydroquinone is around RMB78,000-80,000 (price doubled over the price before the pandemic). Nevertheless, the depreciation of CNY has led to more export of home-made hydroquinone to earn dollars from international market, resulting in the continued short supply and price rise of hydroquinone in the Chinese market, which may possibly rise up to RMB85,000 per ton.
During the Chinese New Year period, the price of DHPPA fell from RMB165,000 to roughly RMB145,000 per ton due to the declined market demand. However, in light of the current price rising trend of hydroquinone, the cost of DHPPA will also rise. According to industry insiders, the current composite cost of DHPPA has reached RMB140,000, it is expected that the product price may shortly escalate to RMB150,000.
DHPPA is the key intermediate of aryloxy phenoxy propionate herbicides, which concerns lots of downstream pesticide varieties, mainly including:
Each year, hundreds of tons of DHPPA are imported by India from China, which is not big enough to affect the overall supply of DHPPA.
If you wish to know more about the upstream and downstream industry chain, please contact the author of this article as below:
Erwin Xue
erwin@agropages.com
Mobile: +86 13750884233/ +1 765-999-1011(Google Voice)
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