CCM has analysed the market
trend of glyphosate in China in the year 2016 with the focus on the price
development and the supply situation throughout the year. Furthermore, the
market trend of glyphosate in 2017 is analysed, backed up by the
historical data as well as future events and developments, that will have a
decisive impact on the glyphosate market.
Source: Pixabay
2016
China’s glyphosate technical price in
2016 was marked with a continuously decrease in the first two-third of the year
and the following rebounding off the price in the last third. However, the
long-term falling in most months of the year has led to the lowest average
price of glyphosate technical in 2016 compared to the last 3 years. The average
unit price has been USD2,878/t, which is a decrease of over USD400 to 2015 and
even almost USD2,000 compared to 2014, according to CCM.
2016 experienced a fluctuation
in glyphosate technical price of about USD976/t. The lowest point was in August
with a price of USD2,662/t and the peak was reached at the end of the year after
a continuing rose in four months till December, stating a price of USD3,563/t.
CCM has also discovered, that the typical seasonal fluctuation of the
glyphosate technical price in China is getting less during the last years,
which is an indicator for a policy-driven market development instead of a
demand-driven one.
The price fall in the beginning
and middle of 2016 can be explained by a very competitive behavior of China’s
pesticides manufacturers, trying to get some market share in the situation of
high supply of glyphosate technical. The prices were lowered to get some piece
of the cake. Additionally, raw materials of glyphosate technical, namely bulk
pesticides and glycine, showed dramatically low prices, partly even record lows
in their prices, which causes the price fall of downstream products like
glyphosate technical as well.
On the other hand, the price
rebound in the last four months of 2016 is the result of the tighter supply of
glyphosate technical and some of its upstream materials. The tight supply
appeared because the Chinese government has strengthened their efforts in
environmental protection and forced highly pollution companies to lower or even
cut their production completely. Some companies also used the depressed market
situation to achieve some acquisitions, hoping for higher profits after it.
The supply situation, according
to CCM, can be summarized in a production capacity, output and operating rate
of about 1 million tonnes in 2016.
Monthly
market price of glyphosate TC in China, 2014-2016 in USD/t
Source:
CCM
2017
CCM predicts, that that the price of
glyphosate technical will fluctuate between a level of USD3,309-USD4,748/t in
China in 2017. On the one hand, the environmental inspections of China’s
government will go on in 2017, keeping the price of raw materials and
glyphosate technical itself high in the new year. The production limitations
and environment protection systems implementations are not limited to the
pesticides industry, but to many high-polluting industries in China. Hence, the
overseas market is likely to accept overall higher prices from China, which can
keep the price high in general.
The news of OPEC members, to limit the
oil production in terms of raising the price of oil again, will also have its
effect on the pesticide production worldwide. Higher oil prices cause higher
production costs of pesticides, including glyphosate technical. So, an
international price rise of glyphosate technical can be the result, in which
case the Chinese producers are very likely to follow the price rise with their
own products.
According to CCM, the output of
glyphosate in China is not going to be expanded or limited in 2017. Glyphosate
is part of the restricted list of the NDRC, which will not allow new
participants to join the market. The environmental inspections will continue,
which also leads to a stable output of glyphosate technical with now rise in
the short term. Finally, bad news about glyphosate still causes a decent demand
for this pesticide worldwide. Although, the domestic demand is likely to
increase in 2017, looking at the ban of paraquat AS in China and the resulting
search for substitutes, which can be found in glyphosate technical.
What’s more, glyphosate producers have
to be aware of other herbicides-tolerant systems, that can be a substitute for
glyphosate in 2017. Dicamba is one of the main competitive products to
glyphosate, mainly used in the USA for an example.
About CCM:
CCM is the leading market intelligence
provider for China’s agriculture, chemicals, food & ingredients and life
science markets.
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