Recovery of Glyphosate Price, Manufacturing Enterprises Still Hard to Make Profits

Recently, the price of glyphosate begins to rebound. Take Xinan Chemical Industry for example, last week, the latest price of glyphosate have risen to 24,500 yuan / ton, which increases by about 22.5%. Chinese chemical industry researcher Chang Yizhi pointed out that, the price of glyphosate in 2008 boomed. However, later because of the impact of the rapid expansion of production capacity and international financial crisis, the price of glyphosate declined rapidly. Currently, the glyphosate price has hit the bottom, and the development of the whole industry is in the recession state. Despite of the recent recovery of glyphosate price, but because the price of upstream raw materials is also rising, so it is still difficult for the manufacturing enterprises of glyphosate to make profits. Chang Yizhi pointed out that, currently, the price of raw materials in international market is rising constantly. While in the domestic, in order to realize the targets for energy saving and reducing emissions, many provinces and municipalities have implemented measures to limit power on the part of chemical manufacturing enterprises, which leads to the reduction of operating rate of capacity for some raw materials manufacturing enterprises, thus causing the reduction of market supply of raw materials. As a result, it promotes the rising of the price of domestic raw materials, and exerts some cost pressure on glyphosate manufacturing enterprises. What’s more, the current global production capacity of glyphosate has been seriously surplus, especially in China. Chang Yizhi pointed out that, due to the excessive production capacity, almost half of the domestic glyphosate production equipments are in the shutdown state, which greatly limits the development of glyphosate manufacturing enterprises. According to the report, it shows that by the January of 2010, the production capacity of glyphosate in China had reached 700,000 tons / year. It is estimated that, by the end of 2010, the total production capacity of glyphosate in China is likely to reach 850, 000 tons / year. However, at present, the domestic demand for glyphosate is only about 50,000 tons, and the total annual global demand for glyphosate is only 700,000 to 750,000 tons. Experts also pointed out that, as the serious surplus of production capacity, it is difficult for the price of glyphosate to return to the level before the financial crisis. At present, most of the domestic glyphosate production companies are suffering great loss. The whole glyphosate industry is facing with severe “shuffle”. It is expected in the “shuffle” process, some large glyphosate production enterprises will have significant competitive advantages, while some smaller manufacturers will be eliminated.