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Environmental windstorm approaching China again, Glyphosate prices expected to jump
Aug. 3, 2017
Also on July 25, the selling price of Fuhua’s 95% technical powder, delivered to the Shanghai Port, rose by Yuan500/ton, reaching Yuan22,500/ton. In the meantime, the second group of the national environmental inspection team arrived in the provinces of Shandong, Sichuan, Zhejiang, Jilin, Xinjiang, Tibet, Hainan and Qinghai. Among these provinces, Sichuan and Zhejiang are the major Glyphosate producing provinces.
The national environmental inspection team is present in major Glyphosate producing provinces, with restricted supply to appear soon
Looking back to the Glyphosate market over the last several years, its price started to decline continuously, until July 2016 when the price hit the a bottom at Yuan17,000/ton, followed by a situation of low stocks, low capacity running, more and more stringent environmental requirements, until demand from abroad during the high season caused a price rebound, having reached Yuan25,000/ton this January, after which prices started to fall when the high season came to an end.
It is believed that this year, Glyphosate prices will see a repeat of last year or may even go beyond last year. During this year, the national environmental inspection will be carried out twice. The second inspection will be in Shandong, Sichuan, Zhejiang, Jilin, Xinjiang, Tibet, Hainan and Qinghai, of which the Glyphosate capacity of Zhejiang and Sichuan accounts for 37.5 percent of the total of China. It is expected that this environmental inspection will cause an even bigger environmental influence than last year.
Prices of Glycine and Yellow Phosphorus continue to rise, backing up Glyphosate prices
Since June, as impacted by the environmental pressure in Beijing, Tianjin and Hebei, Glycine prices rose significantly by Yuan2,800/ton a month, and are up 31 percent. Due to the sharp rise in the graphite electrode price upstream and the tense supply situation, which is not expected to be solved in a short period of time, the purchase orders taken by most of the factories have been scheduled for the end of July. Yellow phosphorus prices also rose significantly by 11 percent in a month.
At the moment, yellow phosphorus price is quoted at Yuan14,600/ton. The price rise for Glycine and Yellow Phosphorus, which will continue at a later date, will serve as a strong back up for the rising prices of Glyphosate.
Demand expected to revive, Glyphosate to boom
The downstream demand for Glyphosate is expected to revive. Glyphosate is mainly used for GM crops, where 90 percent or above of China’s Glyphosate is produced for export purposes. The fourth quarter in a year is usually the high season for international sourcing of Glyphosate.
The Glyphosate production capacity reached 67.6 percent in June, which almost reached maximum capacity, if taking into account the fact that there are lots of small capacities and eliminated capacities. The gap to maximized running capacity over the last three years is only 0.8 percent. When the high season demand sets in, Glyphosate supply will become intense and is expected to boom again.
Source: AgroNews
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