The price of technical fell 80%, but the production capacity increased by 20 times, what is the trend of Chlorantraniliprole?

Chlorantraniliprole has developed rapidly in the domestic market since the compound patent expired in 2022. However, the price of technical has plummeted by 80% in two years, while production capacity has increased 20 times. In the face of this situation, what is the trend of Chlorantraniliprole in 2024? Has become the focus of the industry.

Production capacity increased 20-fold in two years The market is becoming more and more competitive

Since its launch in 2008, Chlorantraniliprole has been sold in more than 130 countries around the world, Chlorantraniliprole has excellent user experience and market reputation, creating a number of sales miracles, and sales of more than 1 billion US dollars for 10 consecutive years.

It is reported that in 2020, the global sales of Chlorantraniliprole will be $1.725 billion, and the sales of FMC’s Chlorantraniliprole with patents will be $1.5 billion, accounting for 87% of the market share. According to the forecast of professional institutions, the market size of Chlorantraniliprole in 2027 will be $2.32 billion, with a compound growth rate of 4.4% from 2021 to 2027. With the localization of Chlorantraniliprole, global Chlorantraniliprole sales will exceed $2 billion in 2023.

In August 2022, with the expiration of the patent for Chlorantraniliprole compounds, Chlorantraniliprole technicals also opened a new era of localization. According to ICAMA statistics, as of the end of December 2023, there are 17 Chlorantraniliprole technicals documents in China, and the domestic environmental assessment capacity has been declared more than 250,000 tons, and a war without smoke in the pesticide market has opened.

In August 2023, the production capacity of Chlorantraniliprole and related intermediates in domestic chemical enterprises was 86,000 t/a, but by the end of December, this figure soared to 200,000 t/a, and in just four months, the production capacity increased by two times, the speed is like a rocket!" A person in charge of a chemical enterprise in Shandong Province talked about.

But this is not surprising. On August 13, 2023, the patent compound of FMC’s Chlorantraniliprole officially expired, and Chlorantraniliprole officially entered the first year of localization. The single biggest problem in front of the localization is that the company still retains a synthetic patent for Chlorantraniliprole, which is valid until 2025, that is, Chlorantraniliprole intermediate patent is still protected. But this is not enough to stop domestic enterprises competing to layout, the enthusiasm of the newspaper product, in the face of this attractive big "cake", from the technical to the formulation of various companies are poised to seize the track.

According to the China Pesticide Information Network, at present, there are 17 domestic companies that have approved the registration of Chlorantraniliprole, including 15 domestic enterprises such as Shandong Youdao Chemical, Nanjing Red Sun, Weifang Rainbow, and Lier Chemical, as well as two foreign companies FMC and India TAGROS Company. 

It can be seen that the competition on the Chlorantraniliprole technical’s track is mainly dominated by listed enterprises (large enterprises) with strong resources and funds, and small and medium-sized pesticide enterprises are difficult to enter the game under the high authorization cost of Chlorantraniliprole.

In 2023, the domestic production capacity registration entered a blowout period, with the continuous expansion of the production capacity of technical, the number of new and proposed projects, and the growth rate of supply is significantly higher than the growth rate of demand, China's Chlorantraniliprole technical market is facing the risk of overcapacity.

In October 2022, Youdao Chemical officially obtained the registration of Chlorantraniliprole, and subsequently launched the market. This makes Youdao the only compliant enterprise with the industrial production capacity of technical in addition to the original patent vendor. In 2023, the company's production stabilized at 150 tons per month.

In January 2024, Youdao Chemical’s Phase II of 10,000-ton Chlorantraniliprole technical device successfully reached production, stable operation, reliable quality. The device adopts self-developed continuous flow process and equipment, the construction period is greatly shortened, and the full automatic and accurate control is realized. At present, Youdao Chemical has a total production capacity of 11,000 tons, becoming the world's largest manufacturer, and the competitiveness of its products has been further enhanced.

On July 19, 2023, ST Red Sun said in the investor relations activity that the company, with independent research and development innovation, has successfully built a whole industry chain synthesis process using 2,3-Dichloropyridine as a raw material to synthesize Chlorantraniliprole, which has the advantages of short process route, low cost and environmental protection. At present, the production line with an annual output of 2000 tons of Chlorantraniliprole has been put into operation in Chongqing Wanzhou production Center, and the company will also plan to add new capacity in the future.

Prices have fallen 80% in two years The pattern of technical market is reshaped

Production capacity continues to expand, corresponding to the price all the way down. With the continuous increase of Chlorantraniliprole localization and production capacity, its price has also plummeted. In 2022, Chlorantraniliprole quoted 2.4 million yuan/ton, which fell to 600,000 yuan/ton.

Shandong Youdao Chemical, as the earliest company to put into production of Chlorantraniliprole, first reduced the price of technical  from 2.4 million yuan per ton to less than 600,000 yuan, which caused widespread concern in the industry, and made the registration cost of domestic formulation enterprises reduced to less than 1.5 million yuan.

According to the SINO-AGRI’s technical price index data show that the price of Chlorantraniliprole technical continued to decline from the peak of 2.4 million yuan/ton to stabilize at about 500,000 yuan/ton in the first half of 2023. After May 2023, the price of technical fell below 500,000 yuan/ton. And the latest offer is down to 310,000 yuan/ton. This significant price drop reflects the fierce competition in the market. 

Some analysts pointed out that in 2020-2021, the global production capacity of Chlorantraniliprole will be 5000-6000 tons. By 2023, China's enterprises plan to invest 20 times the production capacity. According to the technical market usage, China's annual production capacity is enough for nearly 20 years of global use, oversupply, the price of  technical has become an inevitable trend.

It is reported that in 2023, the enterprises that can provide Chlorantraniliprole are Youdao Chemical, RedSun, Hebei Chengxin, Zhongshan Chemical and other enterprises have not heard that they can provide stable sales of technical.

In September 2023, at the "Biamide insecticide Industry Development and Market Development Strategy Seminar" hosted by the China Pesticide Industry Association in Shijiazhuang, Hebei Province, Gao Lianhua mentioned that with the Chlorantraniliprole technical produced by Chinese local enterprises put on the market, Another reason for the drop in prices is that Chinese companies have not yet been approved for self-registration or support registration in major foreign target markets such as Brazil. It is hoped that Chinese enterprises will do a good job in the top-level design of the production and market launch of products whose patents are about to expire, and balance the time coordination between the production and registration of expired products.

It is expected that in 2024, the price of Chlorantraniliprole may stop falling and rise. An expert said that the price of domestic Chlorantraniliprole has obvious advantages compared with imported products, and the cost performance is increasingly prominent in the domestic and foreign formulation terminal markets.

In addition, Chlorantraniliprole will have an impact on the lepidoptera single-dose products used in field crop medicines such as paddy insecticides, as well as traditional insecticides used in cash crops and fruit trees.

However, some companies pointed out that the price of Chlorantraniliprole is closely related to product quality. Qi of UPL China’s sales director said that the current market price drop for Chlorantraniliprole is partly due to manufacturers focusing too much on cash flow and sales volume, while ignoring profit margins. The difference in product quality leads to different formulation effects, and the price of technical is still possible to rise in the future.