Bound by Ethyl mercaptan, China’s clethodim production blocked
India, pretty much like China, relies on importation, with a relatively stable import volume in recent years, which were 2,387 tons in 2020, 2,300 tons in 2021 and 1,967 tons in January – July 2023. The data show that Ethyl mercaptan was purchased in the peak season from September - November each year. In case that Indian companies did not make advance purchase in the first half of this year, then the total purchases of the product in India in the whole year of 2022 should significantly increase year on year.
As far as the Ethyl mercaptan purchase price is concerned, India’s purchasing price remains stable between US$3-3.5/kg CIF for years. The price of US$3.41 at the end of August would be only RMB23,400/ton, whilst the purchase price of ETHYL MERCAPTAN of Chinese clethodim manufacturers reached as high as the most surprising price of RMB80,000 /ton. The raw material alone adds at least RMB20,000 to the production cost of the Chinese manufacturers. Yet, the Chinese companies could bear the higher cost and have not significantly raised the price of clethodim. In the past year, clethodim supplied from China still maintained a cost advantage over Indian supply for most of the time, attributable to the benefit of tax rebate.
The clethodim production volume in India is relatively stable, with annual volume of less than 7,500 tons (100% basis ), which, however, may increase this year. If China's production can remain normal in the second half of the year, then the global clethodim production is likely to approach 30,000 tons.
The production of Chinese manufacturers has been affected by a lot of factors such as the tight supply of raw materials & intermediates, sharp increase in price, power curtailment, accidents in industrial parks. Moreover, an explosion occurred in a clethodim plant in India this year. In general, it looks that the production of clethodim is expected to suffer from lots of happenings this year and an immediate suffering is the supply of Ethyl mercaptan, which the clethodim manufacturers are faced with till the end of the year, if the tight supply is not alleviated. At the same time, Chinese chemical companies are called on to take immediate action to increase capacity of Ethyl mercaptan to solve the problem of supply of this raw material under the control of others.
The above is the price curve of clethodim (in RMB1,000), which reveals the short supply and the rising price resulting from the shortage of ETHYL MERCAPTAN.