Price & supply trend: Insufficient release of pesticide capacity in China after COVID-19 epidemic

Date:03-27-2020

China's agrochemical market continues to rebound, and upstream production has resumed gradually. Meanwhile, the stocks of downstream manufacturers have been replenished ready for sale. The formulation end market has strong demand for spot supplies. The products formulation manufacturers have been affected by the epidemic, reducing the supply of technical materials and packaging materials. The overall market appears to be quite differentiated, where products at low stock levels and low production capacities are in short supply while prices are going up. However, the market trend in major products is mainly stable.

Herbicide market

The production capacity of glyphosate technical has increased, downstream formulation production costs have improved, and their replenishment is slowing down. As the upstream production capacity of glufosinate technical is concentrated in its epicenter in Hubei, short supply is yet to be experienced while upstream raw materials for diquat mother liquid are in short supply. The pendimethalin technical production load is low, so stocks are being gradually consumed. Because the pesticide-use season is drawing near, market prices are rising. Trifluralin technical is in short supply and mostly produced for exportation due to environmental compliance regulations and the restriction or suspension of the nitrification-based production process. Production of mesotrione technical just restarted and is moving into its peak season. Purchase orders for cyhalofop-butyl technical have begun to increase, so its production capacity has also increased, with stocks staying at low levels. The supply of upstream raw materials for clodinafop-propargyl technical has increased, and its price has dropped slightly. Due to the impact of an accident that caused a shutdown, the production of clethodim technical has been affected, resulting in a price rise, so manufacturers are cautious to make purchase orders. Nicosulfuron technical is in short supply and stocks are at a low level. Amide herbicides have been affected by a failure in the purchase of by-products, resulting in limited production capacity.

Breakdown of herbicide domestic prices:

Product（TC）	100% basis/ actual concentration	Price（1000 RMB/ton）
Glyphosate	95%	22.5
Glufosinate-ammonium	95%	130.0
Diquat	40%	37.0
Pendimethalin	96%	52.0
Trifluralin	97%	45.0
Mesotrione	97%	230.0
Cyhalofop-butyl	97%	165.0
Clodinafop-propargyl	95%	310.0
Clethodim	100% basis	140.0
Nicosulfuron	95%	340.0

Insecticide market

Affected by the epidemic in Hubei Province, the production capacities of avermectin and emamectin benzoate manufacturers in the province is still low, resulting in short supply. Due to reduced exports, a high stock level of neonicotinoid pesticide technical has existed and prices remain low. Stocks of lambda-cyhalothric acid at the upstream of pyrethroids somewhat decreased, with prices remaining stable and supply being tight. Stocks of pymetrozine technical are being consumed and supply is becoming tight while the terminal flonicamid technical market resumed production, increasing trade volume. Chlorfenapyr technical, phenylhydrazine technical and methoxyfenozide technical, which are all facing issues related to the centralization of production, have been affected by the epidemic, with their production levels being low, resulting in short supply. Due to increased demand, the price of organophosphorus technical is rising. There are fewer current manufacturers of malathion, but a locust plague increased export levels. Demand for chlorpyrifos technical is growing, with production capacity increasing. With increasing demand, the supply of chlorfluazuron technical became relatively tight, and as the spirodiclofen and propargite technical season is coming, prices are rising, stocks are low and supply is tight. The demand for indoxacarb technical is increasing and stocks are decreasing.

Breakdown of domestic insecticide prices:

Product（TC）	100% basis/ actual concentration	Price（1000 RMB/ton）
Abamectin fine powder	95%	695.0
Emamectin benzoate	100% basis	1,070.0
Imidacloprid	96%	125.0
Pymetrozine	97%	200.0
Lambda-cyhalothrin	96%	215.0
Chlorfenapyr	97%	280.0
Malathion	90%	28.0
Chlorpyrifos	97%	48.0
Spirodiclofen	97%	137.0
Propargite	90%	40.5

Fungicide market

The production capacity of difenoconazole technical is low and stocks are also low, resulting in a wide gap between demand and supply. The export of propiconazole technical declined and its price remains low, due to a high level of stocks. The demand for hexaconazole technical has increased while production capacity is low, so supply will remain tight in the short period-term. The production capacity and stock levels of tebuconazole technical are low while export demand for upstream intermediates is large. The production capacity of epoxiconazole technical among domestic manufacturers is low, and supply is extremely tight. Triazole fungicide stocks still remain low. Affected by the shortage of triazoles for mixture, the demand for pyraclostrobin technical has not been met by downstream formulation manufacturers, therefore, supply has increased, which may cause competition among manufacturers at a later date. The supply of the upstream intermediate, azoxystrobin technical, is tight, as demand recently increased. The majority of manufacturers of kresoxim-methyl technical are under shutdown, causing low stocks. The domestic manufacturers of trifloxystrobin have not yet restarted production so stocks are low. As certain problems related to the import of raw materials for kresoxim-methyl technical and trifloxystrobin technical are present, the supply of both will be tight in the future. Stocks of prochloraz technical cannot be replenished after delayed production, so this is expected to be tight for some time. The production capacity of cyazofamid is inadequate and there are few stocks available on the market. It should be noted that the currently depressed market has covered up the supply shortage.

Breakdown of domestic fungicide prices:

Product（TC）	100% basis/ actual concentration	Price（1000 RMB/ton）
Difenoconazole	96%	260.0
Propiconazole	95%	95.0
Hexaconazole	95%	160.0
Tebuconazole	97%	200.0
Epoxiconazole	95%	400.0
Pyraclostrobin	98%	190.0
Azoxystrobin	98%	270.0
Kresoxim-methyl	97%	340.0
Trifloxystrobin	97%	620.0
Prochloraz	96%	155.0

Intermediate market

This month, crude oil prices fell sharply, the cost of basic chemical raw materials could not be sustained, actual CCMP transactions fell, and CCMT supplies decreased while prices rose. Pyrethroid intermediates, such as dimethyl-4-pentenoic acid methyl ester and m-Phenoxybenzaldehyde, are relatively stable, but stocks of lambda-cyhalothric acid have slightly rebounded after consumption.

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Herbicide: Glufosinate, Diquat , Mesotrione, Clomazone

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