Chinese pesticide producers might be slightly relieved from fewer costs of raw materials

Date:07-22-2011

Though entered into the tough time of costly production from the beginning of this year (AgroNews 2011-01-18), the struggling Chinese manufacturers might get a breath from the likely lower price of some raw materials in second half of this year.

China is the largest sulfur importer of the world as it could only self supply a quarter of its demand, which made China highly depend on global market. However, the restless turmoil in the Middle East and earthquake in Japan have resulted price rise of sulfur. Thus China has launched several initiatives in solving the supply shortage, the projects such as Puguang Gas field and some coastal refining facilities to be in operating in the next half of the year, which will boost Chinese sulfur annual production by 600,000 to 80,000 tons. Furthermore, restrictions of phosphate fertilizer exports will dampen the demand to some extent. Thus supply shortage of sulfur is expected to be eased in the second half year.

Price of the phosphor has experienced a continuous increase since last October and maintained at 15000 Yuan per ton. As a non-renewable resource, volatile decrease in the price is unlikely happen in China, in the wake of restriction exports of phosphate fertilizer in the next half of the year, the price is expect to be stable with a slight decline.

The chlorine liquid price has surged sharply since last quarter of 2010 due to power shortages in China and peaked at 3800 Yuan per tons in some eastern regions. Nevertheless, signs of price loosening has presented to different extent in some places, for example, the average quotation is 2000 Yuan per ton in Southwestern while some manufacturers in Shandong province quoted at 500 Yuan per ton. China has completed some production installations this year, which will boost the capacity and some large chlorine liquid-consumed industries such as PVC will be in lower manufacturing utilization rate owing to power shortage problem. It is believed that the price is in downtrend thanks to improved supply and demand condition.

Vigorous development in fluorine chemistry industry and newly employed protection policies on the resource have pushed up the fluorite price from 1650 Yuan per ton to currently 3000 Yuan per ton. And rapid price hikes of hydrofluoric acid and other fluorides were result from influx of hot money inspired by strong demands and restrained supplies fluoric products market, as the market returning to see sense, prices for the fluoric related products such as fluorite, hydrofluoric acid and fluorides are expected to be in shock consolidation trend.

Prices of other raw materials such as arene, styrene and aniline are expected to be in downtrend. In addition, china’s new improved polices in logistics charges (AgroNews 2011-06-24) will relieve the Chinese pesticide manufacturers for some degree.

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