With the global alleviation of COVID-19 as
well as the sustained economic recovery in China, the chemical industry in
China has entered into a boom cycle. In particular, main chemical products from
Hubei Xingfa, such as glyphosate, silicone, and dimethyl sulfoxide have shown a
significant increase in market price. Facing favorable market opportunities,
the company has scientifically organized production and operation, formulated
flexible sales strategies, and achieved a record high in the first half of the year.
In the first half of 2021, Hubei Xingfa achieved sales revenues of USD1.52
billion (RMB9.85 billion), up by 5.48% YoY. Net profits attributed to
shareholders of the listed company surged by 730.05% YoY to USD176.46 million
(RMB1.14 billion).
Glyphosate is the most widely used herbicide
in the world, accounting for approximately 30% in the herbicide market in the
world. In 2020, the global glyphosate production capacity was about 1.1 million
tons. There are about ten glyphosate manufacturers in the world, and the
American company, Monsanto, annually produces 370 thousand tons of glyphosate.
The remaining capacity is mainly concentrated in China.
Glyphosphate is primarily synthesized with a
glycine method or an iminodiacetic acid IDA method. Many enterprises in China
mostly use a glycine method to produce glyphosate. With the increase in
planting area of genetically modified crops, and with other herbicides
leaving the herbicide market, such as paraquat, glyphosate will become an
irreplaceable product, and the market demand for glyphosate is estimated to
increase steadily.
Hubei Xingfa with large profits and growing strength in glyphosate
industry
Hubei Xingfa's subsidiary company, Taisheng,
currently has a 180 thousand ton annual glyphosate production capacity, and the
scale of Taisheng's production capacity ranks first in China. Another one of
Hubei Xingfa's subsidiary companies, Inner Mongolia Xingfa, currently has a 50
thousand ton annual glyphosate production capacity, with a plan to increase to
230 thousand tons of annual glyphosate production capacity by the second
quarter of 2022.
Taisheng has significant advantages over other
companies in terms of raw material. Without relying on external resources, the
company still has self-supporting annual glyphosate production capacity of
100,000 tons. Taisheng and its subsidiary companies also have large-scale
yellow phosphorus production capacity, which can supply nearby consumers.
Hydrochloric acid, which is a side product from the organosilicon devices in
the industrial parks of Yichang, is also necessary during the production of
glyphosate. In addition, the organosilicon devices can effectively consume
methyl chloride created by glyphosate, which can reduce the environmental risks
associated with glyphosate.
In the first half of 2021, due to the
continuously strong demand in the overseas market, the prices of yellow
phosphorus, acetic acid, glyphosate and other raw materials from China have
continued to rise sharply. The price of glyphosate reached to nearly RMB 50
thousand per ton including tax.
Hubei Xingfa to increase presence in silicone market
In recent years, the silicone industry in
China has developed quickly with increasing demand in the industries of
architecture, vehicles, electricity, alternative energy, and communication
electronics. In 2020, the global organic silicon monomer production capacity
was about 6 million tons, of which nearly 60% of the production capacity is
distributed among about 10 companies in China.
Hubei Xingfa's subsidiary company Hubei
Xingrui currently has the capacity to produce 360 thousand tons of silicone
monomers per year, and its another subsidiary company Inner Mongolia Xingfa
plans to reach an annual production capacity of 400 thousand tons by June 2023.
After the completion of this project by Inner Mongolia Xingfa, the
competitiveness and market influence of Hubei Xingfa in the silicone industry
will be further enhanced.
For more information on China's glyphosate market,
please check our Glyphosate
China Monthly Report.