Feature: S-metolachlor, a high-efficiency herbicide on its way to localization in China (PART 2)

Date:03-22-2024

This article is initially published in 2024 China Pesticide Industry Watch magaznie , click to downlowd 

Birth of s-metolachlor

S-metolachlor is a chloroacetamide herbicide discovered by the formerly Ciba-Geigy (now Syngenta) in 1982, which is an active S-isomer obtained by removing the inactive R-isomer based on metolachlor. 

This product inhibits cell growth by inhibiting the synthesis of very-long-chain fatty acids, thus achieving the effect of weeding. As a highly active isomer of metolachlor, s-metolachlor has better safety and impact of control, with a broad spectrum for crop applications, enabling the product to become an indispensable herbicide for application to major food crops such as soy and corn.

In 1997, s-metolachlor was launched for the first time in the United States. In 2005, the product release in the European Union (EU) and China was approved, and in October 2001, its compound patent expired. Today, s-metolachlor has been registered in many countries and regions, including 20 EU countries, the United States, Canada, and Australia.

The global sales of s-metolachlor have exceeded US$700 million, which is still growing steadily. According to data from Phillip, its global sales were $590 million in 2014, $595 million in 2016, $645 million in 2018, $665 million in 2020 and $720 million in 2021. Among the sales over the past years, due to the depressed global market, the sales of s-metolachlor in 2015 dropped slightly to $565 million.（Fig. 1）

Global market grows steadily, Chinese companies continuing market development

In recent years, the global s-metolachlor market has been growing constantly, which shows a promising development trend. China’s major export markets include the United States, Europe, Brazil, China, Mexico and Argentina. According to statistics, from 2012 to 2023, the total global import of s-metolachlor increased from 40,000 tons in 2012 to 90,000 tons in 2023, which is a doubled growth in ten years. 

From a trade territory perspective, before 2019, the global s-metolachlor market was concentrated in the United States. Since then, the markets of Argentina and Brazil in South America have increased yearly, having become a new source of growth. In this period, the proportion of technical material supply from China continued to increase.（Fig. 2）

Concerning the s-metolachlor technical market in the United States, in 2018-2020, the imports in the United States fell by half. In 2021-2023, the import growth was resumed, most of which came from Europe while the import from India was 2,396 tons in 2021, 3,385 tons in 2022 and 1,223 tons in 2023. In terms of the U.S. import of s-metolachlor from Syngenta, the import volume was 22,755 tons in 2022, which increased to 48,977 tons in 2023, revealing a significant increase in Syngenta’s supply to the U.S. market backed-up by the strong growth momentum. 

In the United States, in terms of the most widely used Boundary 6.5EC (S-metolachlor 58.2% + Metribuzin 13.8% EC), the volume of consumption is 9,800 tons, according to data of Kleffman. This means applying to a total of 3,363 hectares of soy, which is like an application of 1.7kg of s-metolachlor per hectare. While the import volume of s-metolachlor technical was doubled in 2023, without an increase of crop planting area in a similar proportion in the same period, the indication would be that high-level stocks exist. How long will it take the market to digest the stocks?（Fig. 3）

Regarding exports of s-metolachlor from China, since 2017, the volume had gradually increased, until the breakout of COVID-19 in 2019, before which the supply from China was on the rise. In 2016, China’s export of s-metolachlor was only 2,800 tons of technical material (converted). In 2017, China’s export surged to 8,000 tons, which rose to 11,000 tons in 2019, before COVID-19. In 2020-2023, exports rose sharply to around 40,000 tons.（Fig. 4~5）

As regards the Chinese s-metolachlor price, it was relatively stable in 2017-2020. After 2020, the price of technical material rose sharply, which doubled coming into 2022, until a stepwise decline in 2023.（Fig. 6）

China’s s-metolachlor product development history: First registration/type of formulation/mixture/manufacturer/industry chain status

In the Chinese market, s-metolachlor undergoes a development process of import, localization of production, and independent innovation, to be outlined as follows: 

• In 2005, Syngenta Crop Protection became China’s first registrant for s-metolachlor technical and formulations, covering respectively s-metolachlor 96% TC and formulation 960 g/L EC

  
  

• In 2012, Shangyu Nutrichem Fine Chemical Co., Ltd obtained the full registration of s-metolachlor technical 96%, becoming the first Chinese enterprise to obtain the full registration of s-metolachlor TC.

  
  

• As of press time, there are in China 86 s-metolachlor registrations, including 24 technical materials with the content of 96%, 97% and 98%. The major manufacturers include Syngenta Crop Protection Co., Ltd, Hangzhou Nutrichem Biotechnology Co., Ltd, Jiangsu Changqing Agrochemical Co., Ltd, and India UPL; the rest are all formulation products which include s-metolachlor 960 g/L EC, S-metolachlor.Terbuthylazine.Mesotrione 49% SC, Mesotrione.S-metolachlor.Atrazine 38.5% SC and S-metolachlor.Atrazine 670 g/L SC and 40% CS. 

According to registration details, the market expansion of s-metolachlor in recent years is attributable to formulation development, especially the mixture of s-metolachlor with mesotrione and atrazine. 

Chinese companies have built up apparent advantages in terms of technical material manufacturing and industry chain development. According to incomplete statistics with AgroPages, the present global production capacity of s-metolachlor (including announced newbuild capacity under construction) is about annually 150,000 tons, of which China’s production capacity is 100,000 tons accounting for about 66%. This is mainly distributed in the production bases in Jiangsu, Shandong, Inner Mongolia, and Hubei. This reflects the rapid improvement of the production capacity of Chinese s-metolachlor manufacturers and their determination to compete for opportunities in the international market. （Table.1）

To sum up, the global leading manufacturers of s-metolachlor include Syngenta, Zhongshan Chemical, Binnong Technology, Nutrichem, Jiangshan, Changqing, and UPL, among which Syngenta and UPL are mainly operating in the United States and Argentina. The s-metolachlor market can be divided into three levels: The high-end level market represented by Syngenta and UPL that entered much earlier and have technology and registrations, as well as the advantages in volume, price, and brand. The second market level refers to the technical material manufacturers represented by Shandong Binnong and Zhongshan Chemical that utilize their technical material advantages to have opened up market in Northeast, North China and Central China, with certain brand influence, and the rest can be categorized as the third level. 

A complete industry chain not only ensures the supply of upstream materials but also enables manufacturers to obtain the effect of scale, which is a driver to further development. The synthesis route of s-metolachlor involves the key intermediate MEA（Fig. 7）, which plays a vital role in the s-metolachlor industry chain. So far, a relatively complete s-metolachlor industry chain has been established. In addition to the production of technical material, the capacity for processing and production of key intermediates has been built up, such as Changqing’s annual 5,000-ton MEA capacity for its own use. 

The Chinese companies have made breakthroughs in the development of overseas markets. According to incomplete statistics, Zhongshan Chemical has established strategic partnerships with several first-class multinational companies, with products being exported to major agricultural countries, including the United States, Argentina, and Russia. In the smaller but important markets, Binnong Technology is doing well in both customized production for multinationals and independent development of the overseas markets. For instance, the company has access to the markets of Australia, Africa, East Europe, and Latin America. 

In the face of intensified regulatory compliance requirements, opportunities and challenges coexist.

At present, as regulation in Europe and the United States becomes more stringent, the market space of conventional pesticides is being squeezed, where s-metolachlor has been subjected to strict control. In February 2023, the French ANSES ordered suspension in part of the use of s-metolachlor. In January 2024, the European Union officially decided not to renew the licensed use of s-metolachlor within the European Union. 

Hence, the strict control of s-metolachlor in the European market is undoubtedly a wake-up call. In this context, what is the difference between the global import volume and global needs? What is the volume overbought in the global market in 2022-2023? How do we balance the huge production capacity with the real market demand? How can manufacturers adjust product operation strategy? These are all issues worth thinking about in the industry.

To be continued.

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2024 China Pesticide Industry Watch