Anhui Bayi Chemical industry Co.,Ltd was temporarily closed by Chinese EPA because of bad environmental protection, which is one of the main producer of o-nitroaniline and o-phenylenediamine(OPDA) (http://www.zhb.gov.cn). Another producer also had an accident of production in the middle of June.

p-nitroaniline is co-product of o-nitroaniline, normal proportion is 2:1(p:o), and only Monsanto can improve it to 2:1(p:o). The inquiry for p-nitroaniline is reducing step by step in local market, manufacturers are transferring cost from o-nitroaniline to p-nitroaniline, and make price of o-nitroaniline keep rising.

o-nitroaniline is basic intermediate of Carbendazim. Combined the two reasons, price of Carbendazim is going up every week.

Today Chinese Ministry of Financial (MOF) publishes a new policy on official website (http://www.mof.gov.cn), and from July 1st, tax refund rate of 2,628 commodities for export will be adjusted from 13% to 11% or 5%, and 553 commodities to 0%. The total 2,831 commodities are up to 37% of all Chinese export products listed by China Customs.

Rate of agrochemicals is down to 5%, which are classified as high energy-consumption, high pollution and high resource-consumption items. This adjustment could make a 6% rise of export price.

MOF says it is a structural adjustment of Chinese export products. Now Chinese government focus more and more on high-tech and low pollution industry and export policy shall lean to those commodities. We think tax refund of rate of chemicals seems to be adjusted lower again in the future.