Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Glyphosate price increase boosting up Chinese companies’ share priceqrcode

Aug. 7, 2012

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Aug. 7, 2012

Due to continued glyphosate price increase, share price of listed companies in relation to glyphosate business have recently risen up against stock market. These companies include Jiangshan Agrochemical, Liuguo Chemical, Wynca, Yangnong Chemical, Sanoda, etc.

Glyphosate price started to go up since last August and has increased quickly this year. At present the price of glyphosate original powder stays at around Yuan 27,000/ton, which is Yuan 6,000 up over the price of Yuan 21,000/ton in August 2011, being nearly 30% up. Since 2012, the price went up approximately by Yuan 3,250/ton, which is 15% up.

As of 16th July, glyphosate price ex-works ranged between Yuan 27,000/ton and 28,300/ton, which is Yuan 1,000 – 2,300 up in one month time over the ex-works price of Yuan 26,000/ton in early June. According to statistics, the glyphosate capacity increased by 22% while price went up, there has been a continued short supply. 

Glyphosate experienced a price hike in 2008, at that time all glyphosate producers in China expanded their capacity, which then resulted in an oversupply situation with the price slumping from the peak of Yuan 120,000/ton in 2008 to Yuan 19,000/ton in the first quarter of 2009, hence falling into a 3-year long phase of adjustment.

An analysis from securities experts shows that the total glyphosate capacity under normal operation in 2011 was roughly 800,000 tons while the capacity which was shut down for 1 – 2 years and above 2 years amounted respectively to 140,000 tons and 70,000 tons. Once glyphosate price starts to shoot up, the capacity in shutdown at present will be resumed. In case of continued implementation of stringent environmental regulation, glyphosate price will be likely to break through Yuan 30,000/ton (13% rise), or may even go up to a maximum of Yuan 34,000/ton (28% rise); but in case of lack of environmental enforcement to waste water control which results in resumed production by environmentally non-conformable producers, glyphosate price may wander at about Yuan 29,000/ton (9% rise).

Source: AgroNews


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