According to CCM, in Jan.-Oct. 2015, China's glyphosate market witnessed wavy downtrend. But the glyphosate price rebounds in Nov., which indicates that China's glyphosate market will see a short-term recovery.
In Jan.-Oct. 2015, China's glyphosate market first went up while present a wavy downtrend. After a round of price drop, glyphosate price rebounds slightly in Nov. This indicates that the market is expected to encounter a short-term recovery. However, regarding the whole industrial chain, the price rebound will be slightly in the short term.
In Jan.-June 2015, the ex-works price of glyphosate TC dropped from the highest USD3,539/t (RMB22,350/t) in Jan. to USD3,056/t (RMB19,300/t) in the first half of July. After that, the glyphosate market entered the adjustment stage, the price has been stabilized until the first half of Oct. In the second half of Oct., the price increased to USD3,095.61/t (RMB19,550/t). In the first half of Nov., the figure climbed up to USD3,104/t (RMB19,600/t).
In Jan.-Aug. 2015, the export price of glyphosate TC continued falling, from USD4.06/kg in Jan. to USD3.23/kg in Aug. Until Sept., the price stabilized at the same level in Aug.
Therefore, glyphosate price rebounds in Nov. both in domestic market and in export market.
Of course, the recovery of glyphosate market needs the supports from upstream raw material market and the downstream consumption market.
Upstream raw material market
In the short term, the upstream raw material market remains stable. For example, the prices of PMIDA, glycine, iminodiacetonitrile, phosphorus trichloride, diethanolamide, paraformaldehyde, chloromethane and dimethoxymethane all maintain steady but is unlikely to rebound in a short run. The raw material market is closely related to the glyphosate market. Since the operation of glyphosate market is not good, the upstream market is waiting for the recovering signal of the glyphosate market. But notably, the price of raw material also stays at the bottom, which has no room to decline. It means that the upstream market can only support the base price of glyphosate but can't obviously contribute to the market recovery.
Downstream consumption market
In view of the consuming regions, in 2016, the consumption of key consuming countries of glyphsoate in the world in 2016 will record a YoY rise. Of these, the glyphosate consumption of large consuming countries such as the US and Argentina will increase by about 3% and 2% respectively. And the consumption in South Africa, Paraguay and Indonesia is expected to increase by about 9%, 7% and 6% separately.
In regard of the crops, according to the monitoring data from CCM, in 2016, the glyphsoate consumption in soybean, corn, wheat, oil palm, rape and cotton will increae by 2%-6%. Thereinto, the glyphosate applied in oil palm and corn will increase by about 6% and 5% respectively. So, the glyphosate consumption will stimulate the production and sales of glyphosate to some extent.
So, supported by the upstream raw material market and stimulated by the downstream consumption market, the glyphosate market will unlikely to drop and will recover for a short term.
Nevertheless, CCM predicts that although the market would recover, the price would not increase too much. There are three reasons. Firstly, undergoing the sharp decline of price in 2008 and 2013, it is hard for the glyphosate market to meet another downtrend in 2015. Purchaser will be more cautious towards the purchasement. Secondly, the glyphosate market still suffers from overcapacity since new capacity is entering the market. Thus the price will not rise greatly. Thirdly, as year-end approaches, some enterprises may launch price-off promotion in order to return the funds, which is a negative factor for the price rise.
In conclusion, China's glyphosate market is expected to see short-term recovery while the price will not rise greatly. For long-term prospect, it depends on whether the glyphosate demand is ideal.
If you are looking for more information about the glyphosate industry, you could have a look at our product: Glyphosate China Month Report
About CCM:
CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.
For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.
Tag: glyphosate