After China continues to impose the anti-dumping duty on 1,2-dichlorobenzene, will the pattern of Diuron in its downstream change?

 Recently, in accordance with Article 48 of the Anti-dumping Regulations of the People's Republic of China, the Ministry of Commerce decided to launch a final review investigation of the anti-dumping measures applied to imports of 1,2-dichlorobenzene originating in Japan and India from January 23, 2024. During the investigation period, anti-dumping duties continued to be imposed on imports of 1,2-dichlorobenzene originating in Japan and India, with anti-dumping duties of 70.4% for Japan and 31.9% for India, respectively.

In response to China's measures to continue to impose anti-dumping duties on 1,2-dichlorobenzene in Japan and India, we take Diuron, the main downstream pesticide product, as an example to observe the market pattern: 

At present,  Diuron’s s main raw materials and intermediates involve 1,2-dichlorobenzene and 3,4-Dichloroaniline.

1,2-dichlorobenzene is widely used as a pharmaceutical intermediate for the synthesis of 3-Chloro-4-fluoroaniline, Norfloxacin and Ciprofloxacin. It can be used as a pesticide intermediate for the synthesis of Plifenate, Diuron, etc. It can be used as dye intermediate for synthesizing disperse violet, disperse turquoise BF, etc. It can also be used in the production of Preservatives, Degreasant, Antirust, etc.

In addition, 1,2-dichlorobenzene can also be used as an organic synthetic solvent for the production of TDI and other products. Regarding the production enterprises of 1,2-dichlorobenzene, China mainly includes Jiangsu Yangnong, Shandong Dacheng, Yangzhou Haichen, and overseas enterprises include Japan KUREHA and India specialized chemical company Aarti Industries Limited.

3,4-Dichloroaniline is a commonly used chemical raw material, which is the intermediate of herbicides such as Propanil, Diuron and Linuron in pesticide synthesis. Regarding the production enterprises of 3,4-Dichloroaniline, the domestic Anhui Guangxin plans to invest about 300 million yuan in the construction of 20,000 t/a of 3,4-Dichloroaniline project in Anhui Dongzhi Economic Development Zone; India's main 3,4-Dichloroaniline exporter is Aarti, and Aarti exports increased from 2000 tons in 2022 to about 4300 tons in 2023, of which 3,500 tons were exported to China in 2023, accounting for about 81% of its annual exports, according to analysis, the increase may come from Propanil.

According to industry research, the main production capacity of Diuron is: Adama’s 10,000 t/a, Ancom(Malaysia)’s 2000 t/a, Anhui Guangxin’s 8000 t/a, Ningxia Wynca’s 4000 t/a, Jiangsu Kuaida ’s 2000 t/a, Chinese enterprises occupy more than half of the production capacity. (Because India does not have the advantage of phosgene for the time being, it is not aware of the production capacity of its enemy.)

On the whole, China continues to impose anti-dumping duties on imports of 1,2-dichlorobenzene from Japan and India, which will help protect the interests of domestic 1,2-dichlorobenzene manufacturers, and domestic enterprises such as Yangnong Group and Shandong Dacheng can continue to consolidate the market position of 1,2-dichlorobenzene. However, in the face of competition from Indian enterprise Aarti, domestic enterprises must improve product quality, strictly control costs, and deeply cultivate the potential of overseas markets in order to maintain competitiveness in the changing situation.

According to phillip data, the global sales of Diuron from 2014 to 2021, reaching a peak of 159 million US dollars in 2016, then declining to 127 million US dollars, and its current sales have stabilized to about 140 million US dollars.

According to incomplete statistics, the global import volume of Diuron in 2023 is 32,000 tons (excluding the double calculation between import and export countries, the technical is between 18,000-20,000 tons), including the technical and formulations. The global demand for Diuron in 2023 is shown in the following chart: Brazil accounts for 20%; Mexico accounted for 14%; The US accounts for 13 per cent; India accounts for 11 per cent. Among them, the Brazilian market imports the largest.

In June 2022, the United States Environmental Protection Agency (US EPA) officially issued the Interim Resolution for the Rereview of Diuron (PID), the biggest impact of the event is that it will ban the use of Diuron in food and feed crops, which covers nearly 40 crops including alfalfa, grapes, corn, and also includes the largest use of cotton.

According to the US EPA statistics from 2015 to 2019, on average, about 2.3 million pounds (about 1,043 tons) of Diuron were applied to 4.4 million acres (about 1.78 million hectares) of farmland in the United States each year. Of these, about 65 percent of Diuron is used to control weeds in cotton fields, and the next highest use of Diuron crops or scenarios include citrus, alfalfa and fallow fields.

According to the survey, after 2022, the demand for Diuron in the US market has declined significantly. However, in this case, in 2023, the import volume of the United States still accounts for 13% of the total global imports, and its market demand has a certain basis.

Recently, the price of Diuron has fallen from the peak of 58,000 yuan/ton in the epidemic year to about 42,000 yuan/ton, and the market competition may be more intense.