Glyphosate recovery in prices is still hard to profit enterprises

Recently, the glyphosate prices rebound. To Xinan Chemical, for example, last week, the latest glyphosate Zhejiang Xinan Chemical prices have risen to 24,500 yuan / ton, or about 22.5%. 

Investment Advisor in the chemical industry researcher Yi-Chi Chang noted that glyphosate in 2008 when prices soared, but then the rapid expansion of the capacity and the international financial crisis, the rapid decline in prices, the current price has dropped to its lowest glyphosate, the development of the industry are in a recession. Despite the recent rebound in the price of glyphosate, but due to the upstream raw material prices are also rising, the profitability of glyphosate production enterprises is limited. 

Yi-Chi Chang pointed out that the current international market prices of raw materials rising. While the domestic emission reduction targets for energy-saving sprint, provinces and municipalities on the part of chemical production enterprises implement power rationing measures, which led to the operating rate of raw material production enterprises reduction in the level, making the market supply of raw materials decreased, thus promoting the domestic prices of raw materials , to glyphosate manufacturers bring some cost pressures. 

Moreover, the current global production capacity of glyphosate has a serious surplus, especially in China. Yi-Chi Chang pointed out that due to overcapacity, domestic glyphosate production plant are in a cut-off almost half of the state, which greatly limits the development of glyphosate production enterprises. According to the Investment Adviser's "Pesticide in China 2010-2015 Forecast of Market Analysis and Investment Report", as of January 2010, China's glyphosate production capacity has reached 70 million tons / year. Expected end of 2010, total production capacity of glyphosate in China will likely reach 85 million tons / year. The current domestic demand for glyphosate only 5 million tons, the total global demand for glyphosate has only 70-75 million tons. 

Investment Advisor in the Research Director Zhang Yan Lin pointed out that as a serious surplus of production capacity, Glyphosate prices return to levels before the financial crisis more difficult, the current domestic glyphosate production and the majority of enterprises are loss of business, the whole industry is facing severe glyphosate the shuffle. Expected in the shuffle process, such as a large share of glyphosate Xin manufacturers with significant competitive advantages will be, while the smaller part of glyphosate production companies will be eliminated.