12 kinds of pesticide technical products in China announced the price increase again. The common herbicide, 95% glyphosate, increased by 500 yuan per ton, and its ex-factory price reached 28,500 CNY/ton. 92% acetochlor and 92% butachlor rose by RMB 1,000/ton, and the ex-factory price was RMB 22,000/ton. Insecticides 70% emamectin benzoate and 95% abamectin powder have increased by 10,000 yuan per ton...
This round of pesticide prices rose again on the basis of the original high prices, mainly due to the pressure of continuous increase in the prices of production materials. In addition, due to the recent epidemic, some pesticide companies are under-operating and supply is limited. At this time, it is the stocking stage before spring plowing. Downstream companies have increased their stocks of pesticide raw materials, and the supply of original drug products on the market is in short supply.
In this regard, Han Ruiyuan, general manager of a pesticide manufacturer in Anhui, said that in fact, pesticides have risen by a wave before. This time the price has risen due to two factors. One is the rise of upstream raw materials, and the other is that the company has sufficient orders. We currently have orders. , Has enough production to the end of March this year, so the trend of rising prices will continue.
Rising pressure on raw materials
In 2020, whether it is herbicides, Insecticides or fungicides, pesticide products have experienced two big increases.
Taking Glyphosate as an example, the first price increase was during the epidemic at the beginning of the year. At that time, glyphosate rebounded from a sharp decline in the second half of 2019, rising from 20,000 CNY/ton to 22,500 CNY/ton. The main reason for this rise is the shortage of raw materials caused by the epidemic and the insufficient supply of products caused by the outage of logistics. For the second time, in August this year, floods caused Sichuan Leshan Fuhua and Sichuan Hebang to suspend production. At that time, the supply of glyphosate from the two companies accounted for 27% of the country’s total supply. After the shutdown, the product supply dropped sharply. The price of glyphosate also rose to 24,750 CNY/ton.
At the beginning of 2021, the price of glyphosate rose, mainly due to the glycine suppliers in Hebei, which tightened production capacity due to the sudden epidemic, and the price rose sharply, resulting in a substantial increase in the production cost of glyphosate; in addition, some glyphosate companies suddenly suffered accidents Parking, the overall start-up of raw materials has been reduced, and it has also given room for glyphosate to increase prices. The current price of glyphosate between 28,500 and 29,000 yuan per ton has increased 41.63% year-on-year.
It is understood that due to rising raw materials, the pressure on pesticide production costs cannot be alleviated. Glyphosate and other pesticide intermediates, whose raw materials are mainly methanol, acetic acid, liquid chlorine, yellow phosphorus, etc., these bulk chemical products will increase sharply in the second half of 2020. The current market price of methanol is about RMB 2,400/ton, double the price during the epidemic; the price of acetic acid is currently around RMB 3,800/ton, which is more than 60% higher than the lowest price in 2020.
The price of raw materials continues to rise, and the price of pesticide products will not stop. Taking glyphosate as an example, the future price increase is a high probability event. It may not be too long to exceed the price of 30,000 CNY/ton.
Price rising trend is difficult to change
Pesticide companies focus on order production. At present, large domestic pesticide companies have sufficient production orders. However, due to upstream raw material supply problems, the current operating rate of pesticide companies is generally insufficient. Recently, the operating rate of glyphosate has dropped from 81.44% to 76.87%, a decrease of 4.57 percentage points from the previous month, resulting in more tight supply. Basically all companies currently stop retail quotations.
"Pesticide companies are generally full of orders. If we want to take orders, we can guarantee the orders in the first 5 months, but we dare not take orders for fear of not being able to deliver. So now we are deliberately controlling orders." Han Ruiyuan told Cailian The reporter said, “As far as I know, many small and medium-sized enterprises take orders as soon as they come to expand the market. Therefore, many enterprises have already filled their orders in the first half of this year. Under such circumstances, pesticide prices will continue to rise.”
It is worth mentioning that 2/3 of the global production capacity of glyphosate is in my country, and 80% of the production will be sold abroad. Industry insiders told the Cailian Press reporter that since the end of last year, foreign countries have seen more optimistic agricultural product markets, higher planting enthusiasm, and increased agricultural product planting areas. Demand for glyphosate has also increased, and export orders for technical raw materials have been abundant. In addition, the domestic trade demand gradually started at the end of last year, and the purchasing enthusiasm of preparation enterprises has increased. The downstream performance of glyphosate has performed well, which has played a supporting role in the rising market. At the same time, foreign competitors of pesticide products have been greatly affected by the epidemic, their output is limited, but the demand side has increased, which is also conducive to the rise of domestic pesticide product prices.
The latest research report of Zhongtai Securities shows that the release of domestic raw drug production capacity is coming to an end, the price is close to the historical average, and there is room for subsequent increases. For enterprises, they can choose pesticide varieties with relatively mild competition and broaden their product lines horizontally.
However, from the perspective of the secondary market, A shares did not react strongly to this price increase. On January 12, the glyphosate manufacturer Jiangshan Co., Ltd. (600389.SZ) led the rise in the pesticide sector, closing at 22.56 yuan on the day, an increase of 7.43%; Yangnong Chemical (600486.SH) reported closing at 145.55 yuan on the same day, an increase of 3.73%; On January 13, Jiangshan shares closed at 22.5 yuan, down 0.27%; Yangnong Chemical closed at 143.41 yuan, down 1.47%; the stock price rose "one-day trip."
