Recently, with the strong demand for glyphosate in the downstream, the demand for glycine in the domestic market has grown rapidly. However, it should also be recognized that the current glycyrrhizic market is also a hidden crisis, and whether or not the strong demand can continue to be variable, companies need to think twice before proceeding with the glycine project.
Downstream driven investment has soared Since last year, the global market for glyphosate has grown rapidly, prices have soared, which has stimulated the growth of glycine, the main raw material for glyphosate production, and prices. The price of glycine in our country has soared from 22,000 yuan/ton to almost 40,000 yuan/ton today. Today, glycine has become one of the few and hottest pesticide intermediates on the market, triggering a domestic construction boom.
Last year, our country's glycine production capacity reached 139,000 tons/year, and the output was about 100,000 tons. In view of the rapid growth in the market demand for glycine from 2006 to 2007, many regions in China have plans to build glycine production facilities in recent years. There are also a number of companies that are planning or planning to build glycine projects, especially a large number of chloroacetic acid producers. It is estimated that in the first half of 2009, the annual production capacity of glycine in China will reach 320,000 to 360,000 tons.
Short-term gap still exists About 90% of industrial grade glycine is used to produce glyphosate, and a small amount is used to produce other fine chemical products. Therefore, the market trend of glycine is closely related to the glyphosate market. At present, about 85% of domestic glyphosate is based on glycine. In 2007, the output of glyphosate in China was about 240,000 tons, and about 140,000 tons of glycine was consumed. With the surge in demand for glyphosate market, domestic glycine production can not meet market demand, leading to skyrocketing prices.
At present, the major glyphosate manufacturers in China such as Xinan Chemical, Nantong Jiangshan, and Fujian Sannong use the glycine route. According to the expansion of domestic glyphosate, it is estimated that by the end of 2008, the domestic production capacity will reach 400,000 tons/year. The production of glyphosate, based on a unit consumption of 0.65 tons/ton, requires approximately 220,000 tons of glycine. With the application in other fields, it is estimated that about 24 million tons of glycine will be needed in total. Even if facilities such as the Three Gorges Project and Hebei Donghua Plant are successfully put into production, domestic supply and demand for glycine will tend to ease in 2008, but it is still relatively tight, so prices will not drop substantially.
At present, there are many companies in the country that plan to build and expand glyphosate projects, and most still choose the glycine route. It is estimated that by 2010, the domestic glyphosate production capacity will reach 650,000 tons/year. Taking the glycine route as 70% of the total production capacity, domestic glyphosate production in 2010 will need to consume about 300,000 tons of glycine; in addition to other applications, it is expected that the domestic demand for glycine will be approximately 330,000 tons in 2010.
Bullish increase in production still needs caution Due to promising market prospects, domestic companies have invested in the expansion or construction of new glycine devices. However, there are hidden dangers in the market, and companies must pay enough attention to some problems in the process of production and construction.
First, the supply of diethanolamine, the main raw material of iminodiacetic acid (IDA), will be eased in the future. A considerable part of the glyphosate plant may use the IDA route to produce glycine. As a result, the production of glycine in foreign countries mainly uses the hydrocyanic acid method. Once the domestic hydrocyanic acid synthesis technology is mature, it will also affect the competitiveness of the chloroacetic acid solution glycine device.
Secondly, at present, domestic production of glycine is mainly carried out by ammonolysis of chloroacetic acid. Since chloroacetic acid is classified as a highly toxic and dangerous chemical, transportation and storage are subject to certain restrictions. Under the premise that there is no raw material chloroacetic acid, blind construction of a glycine device may be possible. Will be at a disadvantage in the fierce market competition in the future.
Third, glycine is a high-energy-consuming product. Launching projects in regions with high energy prices will greatly weaken the competitiveness of the device.
Therefore, in the face of the gigantic market in which profits are currently high, companies planning to start new projects in the country should maintain a calm, carefully weigh their strengths and weaknesses, and actively track the progress of synthetic technology and market demand for domestic related products, to avoid blind investment. Too much risk and waste of resources.
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