2,4-D survey in China:Oversupply has occurred, still facing challenges from environmental protection pressure

Posted on 2018-04-18
2,4-Dichlorophenoxyacetic acid (2,4-D) is an organic compound, serving as a systemic herbicide able to selectively kill most broadleaf weeds. It is one of the oldest and most widely available herbicides worldwide and is produced by many chemical companies since the patent on it has long since expired.
2,4-D is a widely used herbicide in the phenoxy class of chemicals. It is the most commonly used pesticide in the non-agricultural sector and one of the top ten most commonly used in the agricultural sector. The herbicide is effectively used in numerous commercial lawn herbicide mixtures, as well as a weed killer on cereal crops, pastures, and orchards. It is applied directly to aquatic and conventional farming systems to control weeds and is among the most widely distributed pollutants in the environment.
2,4-D is a selective herbicide used to kill broadleaf weeds for post-emergent control. It is a plant growth regulator and mimics the natural plant growth hormone, auxin. 2,4-D remains at high levels within plant tissues and causes rapid cell growth. Plants die when their vascular transport systems become blocked and destroyed by abnormally fast growth. While 2,4-D is normally applied to a plant’s leaves, it can be absorbed through the roots and stems.
In the recent years, the 2,4-D industry in China had witnessed increasing capacity but facing challenges not only from severe competition and the resulting oversupply but also from environmental protection pressure by the government. The overall operating rate of 2,4-D manufacturers can be described as unstable during the last years. According to market intelligence firm CCM, from 2015 to 2016, the output of 2, 4-D technical increased by 12.57% and 25.28% year on year respectively. In 2016, the capacity of 2,4-D technical increased by 32.29% year on year, while the operating rate of 2,4-D technical producers remained stable, which contributed to the significant increase in the output of 2,4-D technical in 2016.
In China, over 60% of 2,4-D technical produced in the country is getting exported overseas while the remaining one-third is used to produce other 2,4-D products, mainly including 2,4-D butylate, 2,4-D amine salt, 2,4-D-Ethylhexyl and 2,4-D Na. 2,4-D products are utilized as herbicides in the form of esters and amine salts. In the domestic market, the main specifications of 2,4-D formulations include 2,4-D butylate 57% EC, 2,4-D amine salt 720g/L SL, 2,4-D amine salt 860g/L SL. In the past five years, the domestic apparent consumption volume of 2,4-D fluctuated along with the changes in supply and demand.
In recent years, 2,4-D industry in China also confronted with barriers, including sluggish demand from the overseas market, pressure from illegal producers, difficulty in pollutant treatment, besides others. Many illegal factories have been producing 2,4-D products during 2011–2012, which had dragged down the growth of market price to some extent because of additional supply. Otherwise, the growth of 2,4-D's market price should be larger since the demand from downstream industry was impressive at that time. For years, although some legal enterprise associations have tried to beat the illegal production through the authorities, however, this effort was hardly rewarding. What's worse, some illegal 2,4-D manufacturers even exported their 2,4-D products with the help of some import & export companies.
Pollutant treatment is a major problem for 2,4-D technical manufacturers. A great deal of wastewater is generated during the production of 2,4-D technical. With stricter requirements about environmental protection, the pollution problems would restrict the development of 2,4-D industry to some extent. For illegal 2,4-D producers, they don't invest in the pollutant treatment devices, which gives their products an edge on price; thus, the 2,4-D industry was severely disturbed.
Oversupply has occurred in China's 2,4-D industry. It is predicted that policies issued by the government, especially environmental protection policies, will impose the largest effect on its future development.
Source: CCM