Domestic media believe that BASF's closure of two glufosinate-ammonium production sites is influenced by China's capacity expansion

On 10 July, 2024, BASF's official website released"BASF Agricultural Solutions plans to change production network ofglufosinate-ammonium".

BASF announced on 10 July that for economic reasons,it plans to cease glufosinate-ammonium production at its Knapsack site inGermany and the Frankfurt production base by the end of 2024. Theglufosinate-ammonium formulation production at the Frankfurt plant will ceasein 2025, followed by the closure of these two production sites.

BASF stated, "We remain committed to providinghigh-quality glufosinate-ammonium solutions to our customers. Meanwhile, wewill continue to focus on developing next-generation glufosinate-ammoniumsolutions."

Regarding the reasons for the plant closures, BASFmentioned that its glufosinate-ammonium production has been increasinglyaffected by factors such as competition from generic pesticidemanufacturers, alternative technologies, and high energy and raw materialcosts. Despite cost-reduction measures at both plants, improvements inproduction volume and profitability have been unsatisfactory.

According to domestic media reports such as ChinaChemical Industry News, the rapid development of the globalglufosinate-ammonium market has driven significant expansion in upstreamcapacities, including TC and its intermediates. Recently,there has been a notable shift and layout of the upstream glufosinate-ammoniumindustry chain in China towards Inner Mongolia and Ningxia. For instance, InnerMongolia Miraculous Crop Science Co., Ltd. has a production capacity of 50,000t/aglufosinate-ammonium, which is gradually being put into operation, with futurecapacity expected to expand to 75,000 tonnes.Additionally, Inner MongoliaHaopuTechnology Co., Ltd. has a project with a production capacity of 10,000t/amethyldiethoxyphosphine.Furthermore, companies like Yongnong Biosciences Co., Ltd., Shandong BinnongTechnology Co., Ltd. and Hebei Veyong Bio-Chemical Co., Ltd.haveestablished and expanded their glufosinate-ammonium TCcapacities in Ningxia and Inner Mongolia. This has significantly increased thesupply capacity of glufosinate-ammonium and has also overextended mid-termmarket demand.

According to statistics, the global effectiveproduction capacity for glufosinate-ammonium reached 121,800 t/a in2023, marking a year-on-year increase of 62.4% compared to 2022. This capacitygrowth mainly came from Chinese enterprises.

Currently,global glufosinate-ammonium capacity is primarily distributed in China, Germany(USA), and India. BASF's capacity is 8,000t/a, accounting for 7% of totalcapacity, with factories in Frankfurt and Michigan. UPL in India also has acapacity of 8,000 t/a, accounting for 7% of global capacity, while theremaining 105,800 t/a come from China, accounting for 86.9% of global capacity.