China:The price of Glufosinate ammonium TK hit a new low in ten years

In May, the pesticide market showed a continued downturn, with the price of Glufosinate ammonium falling particularly sharply. At present, the price of Glufosinate ammonium TK has been as low as 38,000 yuan/ton, only 50% of the same period last year, which is the lowest price in nearly ten years.

Affected by the price reduction of Glufosinate ammonium, the performance of listed pesticide companies with Glufosinate ammonium as the main business has declined. In order to avoid the impact of the price reduction of Glufosinate ammonium, many companies have laid out Glufosinate-P track.

Glufosinate ammonium market oversupply 

On May 19, the Sino-Agri technical price index was 77.84 points, down 13.2% from last year. Among them, the price of pGlufosinate ammonium TK is as low as 38,000 yuan/ton, which is only half of the price of the same period last year. 

The price of Glufosinate ammonium fluctuates, and it can also be seen from the first quarter report of Lier Chemical in 2024, operating income of 1.391 billion yuan, down 43.05% year-on-year; The net profit returned to the mother was 47.841,800 yuan, down 82.59% year-on-year. Lier Chemical said that the company's revenue decline was mainly due to the decline in the price of some technicals during the reporting period.

In response to investor questions, Lier Chemical said that since 2023, the inventory of major agricultural chemical enterprises in the world has been high, and the new production capacity of the industry has been gradually released, resulting in extremely fierce market competition, especially the price of the company's main product Glufosinate ammonium has declined significantly, which has brought greater pressure on the company's operating performance and correspondingly reduced net operating cash flow. At the same time, factors such as geopolitics and settlement risks caused by exchange rate fluctuations have led to a prolonged destocking cycle. Faced with the problems of continuous expansion of production, intensifying competition and external risks, the supply of Glufosinate ammonium in the market exceeds the demand.

Industry insiders said that it is now the lowest price in nearly 10 years, and pharmaceutical companies and large wholesalers are dumping inventory at a loss. At the end of last year, dealers stocked 10% of the Glufosinate-P formulation price of about 20,000 yuan/ton, only after half a year, the price was more than 35%.

The market for Glufosinate-P is growing strongly 

The price of Glufosinate ammonium continued to fall, and the industry enterprises once faced loss pressure. Many companies want to relieve the pressure through the layout of Glufosinate-P. On May 19, the technical of Glufosinate-P was quoted at 88,000 yuan/ton.

In recent years, the market has shown a strong growth momentum. According to incomplete statistics, the current production capacity layout of Glufosinate-P in China has reached more than 310,000 tons, and the annual sales volume of formulations exceeds 20,000 tons.

A number of listed companies have further increased production capacity by expanding production. For example, Limin plans to expand production by 10,000 tons of Glufosinate-P, and the first phase of 2,000 tons of production capacity will begin normal production in the first quarter. The 20,000 tons/year enzymatic r Glufosinate-P project in Jinshi, Hunan Province, a subsidiary of Lier Chemical, has been put into operation, and the 10,000 tons/year biochemical Glufosinate-P project in Jingzhou is expected to be put into operation within the year. Nanjing RedSun's 20,000 tons/year Glufosinate-P project is under construction. Yongnong plans to invest 2.4 billion yuan to build 50,000 tons of Glufosinate-P supporting intermediates and raw materials project, which has passed the environmental assessment in March this year.

At the same time of increasing production capacity, the production technology of Glufosinate-P is also constantly innovative, and the production cost is constantly reduced.

The industry generally believes that the market prospect of Glufosinate-P is broad. With the gradual maturity of the production process, the reduction of production costs and the completion of the registration market layout, the market demand for Glufosinate-P will continue to grow. It is expected that in the next 3-5 years, the demand for Glufosinate-P will increase significantly, and the global terminal sales market will exceed 4 billion US dollars.