Enterprises reduce production on a large scale, and the pesticide market is "rising"

The price of raw materials has risen sharply, and the supply has been greatly reduced

On September 11, the National Development and Reform Commission issued the "Proposal for Improving the Dual Control System of Energy Consumption Intensity and Total Volume" to "double control" energy consumption in high-energy-consuming and high-polluting industries
.
Subsequent power outages and production restrictions resulted in tight prices for some pesticide raw materials, such as yellow phosphorus, liquid caustic soda, and pesticide intermediates, which led to a wider range of production reductions by pesticide companies and a general surge in the pesticide market
.

According to the monitoring of Zhongnong Lihua, China's agrochemical market is experiencing the craziest price increase in the past 10 years, and both the technical price index and the increase rate have reached a record high
.

As of October 3, the technical price index was at 180.
58 points, up 34% from the previous month.
The price index of herbicides, insecticides and fungicides all increased by more than 30%, and 90% of the hundreds of pesticide products tracked appeared.
rise
.

Raw material shortage and soaring prices

In the first half of the year, the energy consumption intensity of 9 provinces (autonomous regions) in China increased rather than decreased, including Yunnan, Zhejiang, Jiangsu and other places, which began to issue policies to restrict the production of related industries, and the prices of some pesticide raw materials such as yellow phosphorus skyrocketed
.

It is understood that Yunnan is the main producing area of ​​yellow phosphorus in China, and its production capacity of yellow phosphorus accounts for more than 40% of the country
.
In order to achieve the annual energy consumption target, on September 11, the Yunnan Provincial Development and Reform Commission issued a document requiring that the average monthly production of yellow phosphorus from September to December should not exceed 10% of the August production, that is, a 90% reduction
.
As soon as this production reduction policy was released, the yellow phosphorus market was instantly detonated
.
In the second week of September, the price of yellow phosphorus in Yunnan jumped directly from 33,000 yuan (ton price, the same below) to 65,000 yuan, a weekly increase of 97%
.

From the current point of view, the operation of yellow phosphorus enterprises in Yunnan has recovered slightly, the operation of some enterprises in Sichuan has increased slightly, and individual maintenance enterprises in Guizhou have resumed commissioning, and the overall supply is improving
.
At present, the market price of yellow phosphorus is 58,000 yuan, a weekly drop of 3,000 yuan, but still a sharp increase of 279% compared with the same period last year
.

The limited production capacity of yellow phosphorus and rising prices also drive the market for phosphorus trichloride, a pesticide intermediate
.
The price of phosphorus trichloride has been rising steadily recently.
At present, phosphorus trichloride enterprises in Shandong are in good condition, and the reference price of the factory transaction is 20,000 to 23,000 yuan; enterprises in Jiangsu are basically in a state of cessation, and there is no export
.

In addition, the market of other pesticide intermediates such as triazole and methyl benzate also rose to varying degrees
.
The surge in the raw material market was also quickly transmitted to downstream pesticide products, resulting in a general rise in the market
.

Supply and demand are generally rising

Guangdong and Jiangsu are two major industrial provinces that have recently introduced stricter policies, and these two provinces account for more than 50% of the country's pesticide production
.
Under the background of "energy consumption" dual control, coupled with the limited raw materials, power cuts and other factors, many pesticide companies have issued notices to stop production and reduce production, and the supply of pesticides has been greatly reduced
.

It is understood that since September this year, China's pesticide raw materials, production capacity, inventory and other monitoring indicators have fluctuated.
Some companies have closed their offers and refused to quote or accept orders.
Traders have a strong hype atmosphere, and anxiety about shortages has spread.
Rare gain
.

In terms of herbicides, supported by the skyrocketing shortage of raw materials such as yellow phosphorus, acetic acid, and glycine, the superimposed demand has increased.
The quotations of amino acid herbicides glyphosate and glufosinate (technical medicine) have increased to 72,000 yuan and 350,000 yuan respectively.
Up 194% and 133% respectively year-on-year; amide herbicides are also affected by the shortage of upstream raw materials and rising prices.
The quotations of amine and metolachlor are also above 40,000 yuan, up 100%, 100%, 63% and 74% respectively year-on-year
.

In terms of pesticides, nicotine was affected by the jump in 2-chloro-5-chloromethylpyridine (CCMP), and the prices of imidacloprid and acetamiprid rose to 230,000 yuan and 200,000 yuan respectively, a year-on-year increase of 156%.
, 100%; pyrethroid insecticides are supported by the rising price of methyl betinate, such as bifenthrin rose to 350,000 yuan, a year-on-year increase of 79%
.

In terms of fungicides, the triazole fungicides were affected by the rise in the raw materials of the intermediate triazole, and the quotations of propiconazole and tebuconazole reached 200,000 yuan and 150,000 yuan respectively, a year-on-year increase of 118% and 63% respectively
.
The price of methoxyacrylate fungicides also rebounded significantly.
For example, azoxystrobin rose by 174%, and the quotation was 400,000 yuan
.

Based on the current state of intermittent disorder in the supply of pesticide industry chain, it is expected that the prices of pesticide varieties with short-term gaps will remain high, and some products may continue to rise
.

Yan Duanxiang, deputy director of the Pesticide Inspection Institute of the Ministry of Agriculture and Rural Affairs, said that the increase in pesticide prices is beneficial to regulating production (production capacity) and reducing the use of chemical pesticides.
This is a question worth pondering on the upstream and downstream of the industry
.

Policies force transformation and upgrading

According to Su Yi, Chairman and General Manager of Zhongnong Lihua Biotechnology Co.
, Ltd.
, according to Zhongnong Lihua’s market research, most pesticide manufacturers failed to lock in upstream raw materials in time, which made it impossible to assess the “double control” belt of subsequent energy consumption.
Due to the impact, "no quotation, no order" may become one of the most popular keywords in the agrochemical industry in 2021
.

"According to the current situation of the market, I think the current market price signals of pesticide technical and intermediates may be in a distorted state
.
" Su Yi believes that the future trend of the agrochemical market and the results caused by market orders cannot be used in the past.
judgment
.
To this end, he suggested that on the one hand, selling necessary products should be based on spot products; on the other hand, waiting for the agrochemical market to stabilize before intervening in the market, or one of the best strategies at present
.

At the same time, Su Yi pointed out that there is no doubt that the "dual control" of energy consumption will play an important role in forcing industrial structure and energy structure adjustment, and helping to achieve carbon peaking and carbon neutrality goals
.

Zhang Bo, a researcher at Anhui Zhongnong Zongheng Agrochemical Information Consulting Co.
, Ltd.
believes that carbon peaking and carbon neutrality will become a normalized policy mechanism in the next 10 or even 30 years.
Enterprises issue policy content and guiding spirit, and pesticide enterprises must have an objective understanding of the government's energy consumption policy, as well as be forward-looking and anticipating, so as to avoid falling into a passive situation
.

Li Zhonghua, secretary-general of the China Pesticide Industry Association, said that the current "double control" of energy consumption and power and production restrictions have had a greater impact on the pesticide industry chain
.
However, at the recent meeting chaired by Premier Li Keqiang, the Ministry of Agriculture and Rural Affairs focused on the impact on seeds, pesticides and chemical fertilizers.
I believe that the state will introduce policies and measures to improve this situation as soon as possible
.