Think Real News

rss

Think Real press releases and industry coverage


Lier Chemical: subsidiary’s glufosinate-ammonium production suspended for 3-month upgrade

On 25 December 2019, Lier Chemical Co., Ltd. (Lier Chemical) made an announcement to suspend the production and combine production lines of its subsidiary, “To optimize the production process of our subsidiary, Guang'an Lier Chemical Co., Ltd. (Guang’an Lier), including glufosinate-ammonium technical, and achieve the combination with MDP production line, Guang'an Lier plans to implement production suspension and integration, with an estimated period of 3 months”.

 

According to Lier Chemical, the production integration will change the company's glufosinate-ammonium production method, which is expected to significantly reduce production costs. The glufosinate-ammonium production line of Guang'an Lier before 2018 was based on the traditional mainstream Strecker process. The production suspension and integration this time is expected to realize the production of part or all glufosinate-ammonium based on MDP intermediate. Reportedly, the production cost of the new process is far lower than that of the Strecker process. It can significantly increase the company's profit margin of glufosinate-ammonium.

 

Suspension of production to adversely affect Lier Chemical's short-term operating performance

 

It is expected to have a short-term adverse impact on the company's operations. A total reduction of the consolidated net profit of about 1.7 million from Q4 2019 to Q1 2020 would be the result if the production is suspended for 3 months. This is based on the total net profit of USD4.9 million in the first three quarters of Guang'an Lier. However, such a production suspension and integration will benefit production and operation in the long run.

 

The long-term demand for glufosinate-ammonium is increasing. The new production method would help Lier Chemical to win in the price war. Among mainstream herbicides, paraquat and glyphosate, respectively, have a gradually shrinking global share due to toxicity issues, while glufosinate-ammonium has relatively low toxicity. Additionally, it can be mixed with glyphosate to solve the problem of crops’ resistance. All this results in gradually increasing market demand. In recent years, many production lines of glufosinate-ammonium have been put into operation, and the price has dropped significantly. The current price of glufosinate-ammonium has fallen to around USD 15,547/t, which is close to the full cost of the mainstream process (Strecker). This is a stage of fierce price competition.

 

In this context, the new process based on self-produced MDP is expected to enable Lier Chemical to get production cost advantage of glufosinate-ammonium. It will help the company to stand out in the price war, consolidate the company's leading position, and expand the company's market share.

 

Glufosinate-ammonium price rebounds, optimistic attitude towards price increase

 

Since November 2018, the domestic price of glufosinate-ammonium has declined by 43%, from USD26,501/t to USD15,053/t, due to the operation of new production lines. It is expected that at Lier Chemical, the net profit would fall by 30-60% year on year in 2019.

 

However, in early December 2019, a glufosinate-ammonium intermediate production company in Hubei Province suspended production for environmental treatment in the industrial park, causing some glufosinate-ammonium companies to limit and even suspend production. In mid-December, the supply of glufosinate-ammonium showed tightness. Now Guang'an Lier also announced the suspension of production. That is to say, the supply of glufosinate will further decrease in the near future. Hence, the price of glufosinate-ammonium would continue to rebound. 


Tags

Sinochem corn Rotam Jiangsu Changqing Hubei Sanonda Hubei Xingfa ADAMA NEEQ Veyong Bio-Chemical Jiangsu Flag CCPIA Registration Export and Import Hunan Haili GM Longlive Biotechnology Jiangsu Yangnong Baolingbao Fuhua Group glyphosate pesticides Nanjing Redsun 草甘膦 RedSun Nantong Jiangshan Hailir environment protection IPO Imidacloprid lysine Paraquat MOA soybean Jiangsu Lanfeng Arysta dicamba pests & diseases wheat Winall Hi-Tech glufosinate-ammonium Pests and Diseases xanthan gum Jiangsu Jiujiujiu carbendazim NATESC glyphsate Noposion CNSA Environmental Protection Sino-Agri Lianhe Chemical QHT Sevencontinent 百草枯 Export Weifang Rainbow Limin Chemical DowDuPont Huapont-Nutrichem spodoptera frugiperda Fengle Seed Market Dynamic Mancozeb Fufeng Group Hebei Veyong Jiangsu Huifeng pyraclostrobin BASF Price Shenzhen Noposion Anhui Guangxin Lier Chemical Nutrichem Bayer ICAMA CAS Crop and Seed Zhejiang Xinnong Huaheng Biotechnology Xiwang Food MIIT Jingbo Dow AgroSciences Shenghua Biok MEP Chlorpyrifos Sanonda Shandong Qiaochang ABA Chemicals Seed Qingdao Hailir Sipcam Jiangsu Kwin VB2 Registration Monitor DuPont MARA Shandong Luba Pakistan CAC ChemChina Project Monitor ABACHEM FMC JPRI Beijing Yoloo Longping High-Tech Azoxystrobin Sichuan Hebang Fuhua Tongda imazamox Star Lake Bioscience Policy Lianhetech Zhejiang Wynca Meihua Bio Henan Lotus Sugar Metaflumizone wheat head blight pesticide Project Dynamic Zhongnongfa Seed Sino-Agri Leading wheat scab Fall Armyworm CAAS Zhongbao Lvnong Yongnong BioSciences Company dynamic Output Bayer CropScience Syngenta Insight Nippon Soda MOFCOM COFCO Biochemical