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Paraquat price falls by 43.6% YoY to USD1,521/t in June 2016
Jul. 15, 2016
Figure : Monthly ex-works price of 42% paraquat TK in China, January 2015-June 2016
Source: Think Real
This is mainly because:
• From 1 July this year, domestic sales of paraquat will be banned, in accordance with No.1745 Announcement jointly made by China’s Ministry of Agriculture (MOA), Ministry of Industry and Information Technology, etc. on 5 April, 2012. It is expected that in the future, about 50% of shares will be claimed by other pesticides.
• Paraquat suppliers decreased prices to strive for overseas orders
• 2015-2016 saw declines in price of agricultural produce and downturn in overall chemical market, indicating falls in consumption and demand
In H1 2016, the price of pyridine (intermediate for paraquat) also fell, trend and extent similar to paraquat.
Changes in output also reflected the sluggish paraquat business. In January-June, domestic output decreased largely, by 50-60% YoY. This is mainly because enterprises stocked up large quantities of paraquat before 2016, due to the No.1745 Announcement. Hence the purchase was weakened, impacting production.
It is predicted that in H2, the paraquat price will maintain at USD1,474-1,504/t. This can be mainly attributed to:
• Focus on export business, due to the official implementation of the ban of paraquat AS in domestic market from 1 July.
• Upsurge of glufosinate ammonium, to replace paraquat.
Figure: Monthly ex-works price of 99% pyridine in China, January 2015-June 2016
Source: Think Real
Also, uncertainties exist in market:
• The government is launching chemical enterprise relocation projects, probably to push up prices of raw materials and costs for paraquat production. Hence, it is of possibility that the price will bottom out;
• MOA is considering the adjustment of paraquat toxicity, to “high toxicity”. So, all paraquat formulations will be knocked out domestically.
Source: Think Real
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