Although the number of herbicide exports increased significantly in 2024, the imbalance between supply and demand led to the failure of prices to rise. Domestic glyphosate production capacity has expanded rapidly in the period of high prices, and the current operating rate is high and the supply exceeds demand, making it difficult for prices to recover. The price of glyphosate rose from 25,100 yuan/ton in February this year to 26,300 yuan/ton in May, and then the price continued to decline, and has now dropped to 24,800 yuan/ton.
(1) The demand for domestic and foreign trade is light, and the inventory in the market continues to increase
Data source: Longzhong Information
At present, the demand side of glyphosate is still light, domestic trade just needs to stock up due to the weather, overseas orders are under pressure due to the rise in sea freight, new orders are not prosperous, downstream customers are holding the currency and purchasing cautiously, resulting in an increase in enterprise inventory, a decrease in risk pressure, and a decline in domestic prices. In the past two weeks, overseas orders have followed up slightly, and the mentality of original drug companies has gradually stabilized.
(2) What is the expected increase in overseas demand in the second half of the year?
This year, the demand for glyphosate in the South American market has advanced by more than a month, resulting in some transportation tensions in the early stage, and the export replenishment in the later period may be reduced, but because the overall planting area in South America is on the rise, the soybean and corn planting area in Brazil will still exceed expectations, and the inventory of terminal preparations in Brazil is significantly lower, especially the inventory of glyphosate granules is low, so there is still strong demand in the Brazil market in the future. In terms of the North American market, China's exports of glyphosate and glufosinate to North America have increased significantly since November last year. In the first five months of this year, the volume of United States imports from China also increased significantly, and it is expected that the replenishment demand in North America will continue to increase in September and October.
(3) Supply and demand play a leading role, and the cost side plays a general role
Data source: Longzhong Information
Compared with the same period last year, the prices of glyphosate and various raw material products have diverged from each other, among which the ex-factory price of 95% of the original drug has decreased by 10,200 yuan/ton year-on-year; From the cost side, the cost side did not change much, up around 0.55% year-on-year. Among them, the price of raw material glycine was low year-on-year, the price of glycine and triethylamine fell by about 300 yuan/ton year-on-year, and the price of yellow phosphorus, liquid chlorine and methanol increased to varying degrees year-on-year, and the sharp decline in the price of raw materials has become an important factor affecting the profit of glyphosate.
At present, the market price of raw material yellow phosphorus has fallen slightly, and the new transaction reference of yellow phosphorus enterprises in Yunnan, Guizhou and Sichuan is around 22,000 yuan/ton, and the price is basically fluctuating within a reasonable range, and the fluctuation range has a limited impact on the current cost of glyphosate; The low level of glycine market continues, although the recent enterprise is expected to rise, but the downstream high price acceptance is limited, the expected increase is not large, and the relatively small consumption of methanol, liquid chlorine, triethylamine, etc. are also normalized. At this stage, the spot trend of glyphosate is sluggish, the price area continues to decline, and the overall profitability of the industry is low.
(4) High temperature + light demand, supplier production reduction, maintenance plan increase
Data source: Longzhong Information
Entering July, with the advent of high temperature weather and the sufficiency of the overall inventory in the market, upstream raw material manufacturers and raw material manufacturers have entered the maintenance season in advance, and the main product glyphosate has been limited and stopped frequently, alleviating the current situation of oversupply. As of July 18, the weekly output of the glyphosate industry was 10,300 tons, and the industry's capacity utilization rate was 60%, a slight decrease from last week.
To sum up, the domestic and foreign trade demand for pre-glyphosate is insufficient, but the production limit or maintenance plan of the production enterprises has increased, and the inquiry in the overseas market has increased, the mentality of the original drug companies has stabilized, and the low-price supply in the early stage is difficult to find, and the glyphosate market is expected to stabilize in the short term. Later, with the launch of the American market and the opening of the domestic winter storage market, the glyphosate market may usher in a rebound in the near future.