Guangzhou, China, February 9, 2017 (Newswire.com) - 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.
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.
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.
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Source: CCM
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