The ex-works price of glyphosate 95% TC
averaged USD2,793/t in mid-Oct. 2016, a raise of 9.85% over the USD2,519/t of
mid-July, which is the biggest rebound since when the glyphosate industry
remained depressed for two years. What’s driving the price rise and how long
will it last? Analyst CCM has the
answers…
Source: Bing
After that Sichuan Fuhua Tongda
Agro-chemical Technology Co., Ltd., a leading glyphosate enterprise in China,
raised its glyphosate price at the end of Aug. 2016, several other glyphosate
enterprises followed the trend to increase the quotations of glyphosate.
According to CCM's price monitoring, in
mid-Oct. 2016, China's glyphosate price still showed a steady uptrend. The
ex-works price of glyphosate 95% TC averaged USD2,793/t, a raise of 9.85% over
the USD2,519/t of mid-July, which is considered the biggest rebound since when
the glyphosate industry remained depressed for two years. However, the price
was still low when compared with the same period last year.
Ex-works
price of glyphosate 95% TC in China, Oct. 2015-Oct. 2016
Source: CCM
What's the reason for this constantly
raising price of glyphosate and for how long will it keep raising? Chen Zaoqun,
chief editor of Herbicides
China News, gave her insights on the questions.
Peak
season for glyphosate
With the approaching of peak sale season
for glyphosate, all glyphosate enterprises in both upstream and downstream hope
to make impressive profits.
In fact, after experiencing market
depression for such a long time, many enterprises are at loss and are in an
urgent need of raising prices to relieve these losses.
"Some domestic glyphosate enterprises
have already received enquiries from the African market," disclosed an
industry insider to CCM.
Rising
costs of raw materials
Rising costs of raw materials in some way
support the increasing price for glyphosate. Currently, the prices of raw
materials for glyphosate, namely glycine, PMIDA etc. showed different degrees
of rises.
The quotation of glycine in East China
increased to USD1,313.28/t-USD1,343.12/t in mid-Oct. and the ex-works price was
about USD1,101/t, up 2.8% MoM.
As for PMIDA, in mid-Oct., both the
quotation and transaction price were up a little bit MoM, with the quotation of
USD1716.21/t-USD1790.83/t and the ex-works price of USD1,602/t, up 0.94% MoM.
In addition, on 21 Sept., the Management Regulations on Overloaded
Transportation Vehicle issued by China's Ministry of Transport and Ministry
of Public Security was implemented, the most significant regulation to tackle the
illegal overload in China.
“With the implementation of the new
regulation, it is possible to push up the transportation cost of bulk
commodities, which may affect the cost of the downstream products,” said Chen.
Price
support from environmental pressure
Affected by the 2016 G20 summit held in
Sept., glyphosate enterprises in Zhejiang Province and the surrounding areas
significantly reduced the operating rate, leading to a fall in the market
supply.
On 19 Sept., the 2016 Glyphosate
Collaborative Group Work Conference was held in Beijing, during which the first
draft of the Glyphosate Industry
Hazardous Wastes Disposal and Treatment Control Technical Specifications
(Outline) was explained and it revealed how the costs of waste water
disposal would further increase the production cost of glyphosate.
In addition, there are rumors that the
second batch of environmental inspection team will be stationed in major
glyphosate producing provinces including Sichuan and Hubei. When the time
comes, the production of enterprises within these areas may be affected, and
therefore market supply would be largely reduced.
“Environmental pressure from the Chinese
government helps increase the production cost of glyphosate while the
suspension on production in most of medium- and small-scale glyphosate
enterprises will hugely affect the supply of glyphosate, which it is a good
chance for the enterprises to rise their quotations,” stated Chen.
Glyphosate
price to keep rising?
As for whether the price of glyphosate will
keep rising in the short term, some industry insiders are still quite optimistic.
Thanks to the AgroChemEx 2016 held in Shanghai in 16-18 Oct., it is believed
that it would boost the transaction and price of glyphosate.
However, some insiders are doubtful on the
rising trend of glyphosate price.
Firstly, although glyphosate enterprises
are bearing environmental pressure, there are no new environmental policies
issued for the glyphosate industry, in other words, large glyphosate
enterprises still maintain high operating rate, and market supply won't be
greatly reduced.
Secondly, the price rises in Sept. boosted
the operating rate of some enterprises and increased market supply, which also
indicated that the price support in the coming future was lessened to some
extent.
Thirdly, according to CCM's research,
Jan.-July 2016 witnessed a YoY rise in China's export volume of glyphosate, but
the figure is likely to slide in Aug.-Dec., given the present slack in the
global demand.
“Whether the glyphosate price will increase
or fall mainly depends on the market. However, it is very likely that the price
will keep going with a small range of increase in short term,” added Chen.
Looking for more information on glyphosate
market in China? Want to monitor the price trend of glyphosate? CCM Online Platform is here to help you! An infinitive database, covering the whole agriculture industry
in China, gives you real-time access to CCM’s over 15-year data and
intelligence.
To get real-time news on glyphosate market
in China immediately, don’t hesitate! Get
your 7-day free trial NOW!