Glyphosate orders are already booked through the fourth quarter, and there will be virtually no new production capacity in the coming years. How can imported yellow phosphorus be obtained?
Category:
Industry Information
Author:
Yangtze River Delta Agricultural Input Information
Source:
New Media Hub for Pesticide Market Information
Release date:
2021-09-26
Glyphosate orders are already booked through the fourth quarter, and there will be virtually no new production capacity in the coming years. How can imported yellow phosphorus be obtained?
On September 10, 2021, the price of 95% glyphosate technical grade rose from RMB 52,000 per ton to RMB 60,000 per ton.
On September 16, 2021, the price of 95% glyphosate technical grade rose from RMB 60,000 per ton to RMB 65,000 per ton.
On September 21–22, 2021, the price of 95% glyphosate technical grade rose from RMB 65,000 per ton to RMB 70,000 per ton.
In just these 15 short days, the price of glyphosate technical grade has surged by RMB 18,000 per ton. Taking a 30% glyphosate aqueous formulation as an example, the net cost per ton of the finished product has increased by at least RMB 5,400! Following confirmation with upstream suppliers, the current quoted price for 33% glyphosate ammonium salt aqueous formulations is RMB 23,000–23,500 per ton for the 1‑kg size, RMB 25,000 per ton for the 200‑g size, and RMB 22,500 per ton for the 5‑kg size. Meanwhile, 41% glyphosate ammonium salt aqueous formulations are currently out of stock nationwide, with no manufacturers willing to produce them. As for 757 glyphosate ammonium salt powder, the lowest quoted price is RMB 2.8 per 50‑g bag, while 88 glyphosate ammonium salt powder is quoted at a minimum of RMB 3.2 per bag; moreover, market supply remains tight, with many manufacturers serving only their existing customers.
The recent price hike for glyphosate technical grade is primarily driven by production restrictions on yellow phosphorus in Yunnan, which caused its price to surge from RMB 30,000 per ton to RMB 60,000 per ton within a week. Although yellow phosphorus prices have now stabilized, glyphosate technical-grade prices have continued to rise—likely due to severe supply shortages in the market, stoking panic, coupled with insufficient yellow phosphorus inventories among glyphosate producers, prompting them to adopt price increases as a strategy to curb sales.
No new production capacity is expected in the short term, and glyphosate inventories continue to decline.
Currently, China’s glyphosate supply remains stable, with no significant changes in production capacity over the past five years. In 2020, production capacity stood at 730,000 tons, while output reached 562,000 tons, down approximately 4% year on year.
In 2020, flooding forced some glyphosate producers to suspend operations, leaving glyphosate inventories significantly lower than in the same period of previous years. Amid environmental‑driven supply‑side reforms and safety‑related crackdowns, a number of small and medium‑sized domestic glyphosate producers have exited the market, leading to an improved industry structure that is gradually evolving toward an oligopolistic landscape.
Overseas, February 2021 was hit by a cold wave, followed six months later by a hurricane; overall, production cuts among international suppliers have become inevitable.
Guojin Securities stated that, as a mature product with many years of sales history, glyphosate currently operates in a tight global supply‑demand balance, and there are virtually no new production capacities expected to come online in the coming years.
Currently, producers have booked most of their orders through the fourth quarter of 2021, leaving limited sales pressure. Raw material prices for yellow phosphorus and glycine remain relatively high, providing some support to glyphosate costs. Market feedback indicates that, with overseas production facilities still affected by hurricanes and no clear timeline for resuming operations, coupled with an upcoming new procurement peak season, manufacturers are proactively raising prices in line with market conditions.
Dongwu Securities expects that yellow phosphorus production may face significant output restrictions in the fourth quarter of 2021, while cost pressures are likely to keep glyphosate prices on an upward trajectory.
Among listed companies, Runfeng Co., Ltd. primarily produces and exports glyphosate formulations; in 2020, its exports of various glyphosate products corresponded to approximately 60,000 tons of glyphosate technical grade. In recent years, the company has consistently ranked first in China’s pesticide export rankings. Xingfa Group’s subsidiary, Taisheng Co., Ltd., currently operates a glyphosate production capacity of 180,000 tons per year (including 50,000 tons per year at its wholly owned subsidiary, Inner Mongolia Xingfa), making it the largest producer in China. Jiangshan Co., Ltd. boasts a glyphosate technical‑grade production capacity of 70,000 tons per year. Hebang Biotech’s dithio‑glyphosate output stands at 200,000 tons per year, with a conversion ratio of roughly 1.5:1—meaning 1.5 tons of dithio‑glyphosate yield 1 ton of glyphosate.
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