As China’s
pesticides industry gathers in Shanghai for this year’s AgroChemEx, CCM analyzes the factors shaping glyphosate prices in the world’s biggest market
for agrochemicals...
2015 has been a
tough year for China’s glyphosate market so far. With weed resistance to the
herbicide increasing around the world, some buyers are beginning to turn to
other products or mixed formulations, and Chinese producers are feeling the
effects.
Ex-works prices
for glyphosate technical (TC) kept falling during the first half of the year
and have hovered at around just RMB19,300/t since July, according to CCM’s
price monitoring data.
But will the
picture brighten for manufacturers as we move towards the new year? Here are
the four factors that will determine what happens to glyphosate prices over the
next few months:
1. Glyphosate TC manufacturers’ sheer determination
not to drop prices further
Since July, most
Chinese glyphosate TC manufacturers have dug their heels in and refused to
lower their prices further, keeping prices stable at around RMB19,300/t.
Some producers
have even started to nudge prices upwards a little bit, including Sichuan Fuhua
Tongda Agrochemical Technology Co. Ltd. and Zhejiang Jingma Chemicals Co. Ltd.,
who both raised their prices RMB500 in September.
“Glyphosate TC
prices have dropped very low, and most manufacturers are unwilling to
down-regulate prices again,” commented Wang Jianwo, Secretary General of the Pesticide
Industry Association of Hunan Province.
2. The ‘October
bounce’
Chinese pesticides
manufacturers often enjoy a ‘bounce’ in demand in October, as the pesticide
industry enters the off-season.
It is common for
both manufacturers and traders to stock up on products during the slack season
in preparation for the spring selling season.
“Based on previous
years, the arrival of the off-season will increase demand for glyphosate in the
near future, to some extent,” commented Chen Zaoqun, Editor of Glyphosate
China Monthly Report. “It’s possible that glyphosate prices may
even rise a little during this period.”
And AgroChemEx
2015, taking place from October 28-30, may itself have an effect on prices. The
exhibition always attracts large numbers of manufacturers and foreign traders,
and Chinese agrochemicals firms pay a lot of attention to this event.
According to Chen,
some manufacturers may be tempted to raise prices during AgroChemEx:
“Before the event,
many agrochemicals enterprises will stabilize or even increase their quotations
for pesticides, so as to give traders the impression that prices will continue
to grow,” said Chen.
“If purchasers show
a strong desire to purchase products, or manufacturers receive plenty of orders
or cooperative agreements, the agrochemicals enterprises are also likely to raise
prices after the meeting,” Chen added.
3. Increasing supplies
Despite these
positive signs, there is no escaping the fact that most glyphosate
manufacturers and traders currently have sufficient inventories and are mainly
selling products from their inventories.
What’s more,
glyphosate output in China is likely to increase even more over the next few
months as several producers resume production after shutting down for equipment
maintenance, and Sichuan Hebang Biotechnology Co., Ltd. opens its newly-built
50,000 t/a glyphosate TC project.
4. Low raw materials prices
Another sign that
there is room for glyphosate prices to fall further is that prices for
intermediate products such as glycine, IDAN, and
PMIDA are stagnant, or in some cases still falling.
In some downturns,
high raw materials prices act to push up the prices of downstream products
despite demand remaining low, but in the case of glyphosate this looks unlikely
to happen for now.
The average
ex-works price of glycine in China fell to RMB9,000 in October, down RMB500
from September, according to CCM’s price monitoring data, while IDAN prices are
at their lowest level in two years, also at around RMB9,000.
“The gloomy glyphosate
market and the stagnant markets for its intermediate products are influencing
each other,” commented Chen. “Glycine and IDAN prices are falling, while the prices of other raw materials and intermediates
remain stable, meaning that there is no upward pressure on glyphosate prices
coming from upstream.”
“In fact, it may
get even worse, for it may drag the price of glyphosate down,” Chen added.
More
information about glyphosate in China:
If you are looking
for more detailed intelligence on China’s glyphosate market, take a look at
some of our latest research below:
Industry
Reports - for a detailed
overview of the market and long-term market forecasts, see our latest Glyphosate
Industry Reports
Market Data - get regular updates on the price,
production, consumption, manufacturing costs and leading producers of
glyphosate in China with our Market
Data service
Trade Analysis - you can find detailed data on every
Chinese glyphosate supplier and trader, and what specifications and prices they
are offering, in our Export
Analysis reports
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